Croatia is expected to vote for European Union membership in a referendum on Sunday, overcoming its wariness about giving away sovereignty in the hope of shoring up its economy despite the bloc's debt crisis.
War and hardline nationalism in the 1990s kept the small Adriatic country on the sidelines for so long that it is now keen to join mainstream Europe, although its appeal has ebbed.
Prime Minister Zoran Milanovic summed up the issue in a parliamentary debate on Thursday: "The situation is not great but Croatia has no better option than the EU now."
Foreign Minister Vesna Pusic called it "a question of life and death". "A rejection would have clearly negative consequences: a fall in the credit rating, withdrawal of investments, job losses," she said.
The latest surveys put support at between 55 and 60%, slightly below what it has been in the past few years. Analysts say the fall has less to do with the euro zone crisis and more with fears about losing sovereignty and the scant details about changes the membership will entail.
Croatia completed seven years of tough entry talks in June. If the referendum passes, all member states must ratify its accession before it joins on July 1, 2013 as only the second ex-Yugoslav republic to do so, after Slovenia in 2004.
It will be obliged to join the euro zone eventually, though not soon, and its economy is already open and exposed to everything taking place in the EU.
"It is true that benefits for our economy, investments and exports, will be smaller than in the previous expansion waves but long-term benefits are unquestionable," said Zdeslav Santic, an analyst at Splitska Banka, a unit of Societe Generale.
FEARS PERSIST IN ANTI-EU CAMP
Croatia has had two years of deep recession and expects another contraction this year. Its current GDP per capita is 61% of the EU average but the country expects some 450 mln euros, or 1% of its GDP, for development projects from EU funds in the first year alone.
However, many of the country's 4.3 mln people, particularly in rural areas, are sceptical of joining any new association, quoting the bad experience from Yugoslavia, where a lot of Croatia's revenues were distributed to poorer republics.
After a 1991-95 independence war crippled its economy and infrastructure, Western investors bought local banks and telecoms and Adriatic tourism bounced back. Some fear foreigners would now buy the remaining companies and resources and want Croatia to remain independent "like Switzerland or Norway".
If it rejects membership now, Croatia would probably need to wait for the rest of the Western Balkans, possibly until the next decade, "and that is something we have always opposed", said Damir Grubisa, a political analyst and EU expert.
"Croatia can only benefit from the EU, sort out its legal and economic system, enact reforms that it wouldn't do on its own. A 'No' would mean going back to old-fashioned ways and nationalism," said Bojana Ivanisevic, a 45-year old lawyer from Zagreb.
A major boost to the Yes camp came from the powerful Roman Catholic church this week, which advised believers to vote in favour, but not everyone was convinced.
