Stockholm, 4 Nov. (AKI) – Slovenia and Croatia on Wednesday agreed to allow international arbitration of a longrunning border dispute. The agreement, signed in Sweden, means Slovenia will no longer block Croatia's bid to become the 28th EU member state by 2011.

"What a great day!” exclaimed Slovenian prime minister Borut Pahor, after signing the agreement with his Croatian counterpart Jadranka Kosor in Stockholm.

Fredrik Reinfeldt, prime minister of Sweden, which currently presides over the EU, witnessed the signing.

The two countries had been in dispute over the small Bay of Piran in the Adriatic Sea since the break-up of Yugoslavia in 1991.

Both governments say they will abide by the decision of independent experts and Wednesday's deal still requires the approval of the two countries' parliaments.

Croatia has called for the border to be drawn down the middle of the bay.

Slovenia exercised its veto because it considered that Croatia had provided maps and documents in the EU negotiations that failed to take account of Slovenia's position.

But Slovenia, which has a much shorter coastline than its neighbour, feared this would deny its ships direct passage to the high seas.

The dispute, which dates back to the breakup of the former Yugoslavia in 1991, has hampered the relations between the two countries, with Slovenia blocking Croatia’s talks on EU membership.

Slovenia is the only former Yugoslav republic to have joined the EU. Croatia hopes to join by 2011.