Croatia and European Union member states have signed the treaty that will pave the way for the Balkan country to become the bloc's 28th member on July 1, 2013.

The ceremony took place on the sidelines of an EU summit dominated by the debt crisis plaguing the bloc's common currency.

"In this festive moment, I am aware that the challenges facing all of us in Croatia and Europe are formidable," Croatian President Ivo Josipovic said, noting nevertheless that his country also "needs more Europe not less", as cited by DPA.

Croatia will face an unprecedent monitoring program before its accession to avoid the problems the EU faced with its last new entrants, Bulgaria and Romania, over rule-of-law issues, DPA notes.

It is unlikely, however, to face sanctions unless it completely fails to follow the bloc's rules, EU officials have said.

"Today is an important milestone, but not yet the end of the road for Croatia. Before the date of accession, reforms will have to continue, new laws adopted and other ones implemented ... We all expect Croatia to perform well," noted European Council President Herman Van Rompuy.

Croatian voters will also have to approve the accession in a vote expected to be held in February. Support for the country's EU membership has reached above 60% in polls.

"I am convinced that our membership of the EU will be endorsed by a great majority of Croatian citizens," outgoing Prime Minister Jadranka Kosor said.

EU officials predicted that Croatia's accession would send an important signal to other countries in the region.

"A signal that our European offer is on the table; that hard work pays off; that the benefits of European integration are within reach if our partners stay the course," European Commission President Jose Manuel Barroso said.

"Croatia is a pioneer, demonstrating in a tangible way that the future of the Western Balkans as a whole lies in the European Union," Herman Van Rompuy declared in turn.

Croatia's EU accession treaty will now have to be ratified by all the 27 member countries.

It took six years to negotiate the treaty. Talks stalled for a time over a number of issues, including a land-ownership dispute with Italy and a border disagreement with Slovenia.