Croatian Prime Minister Ivo Sanader has expressed his delight after his country took a major step towards joining the European Union.
Sanader wants EU membership by 2007
The European Commission said Croatia should get formal candidate status after its political and economic reforms were judged successful.
Mr Sanader toasted the news with champagne in the capital, Zagreb.
"Today we turn a new page in history," he said, as he toasted the news with champagne in the capital, Zagreb.
"We have made
our first concrete step toward joining the European Union.
"Our final goal is Croatia's fully-fledged membership in the EU
within the next few years."
European Union leaders will decide in June whether to endorse the commission's decision, clearing the way to formal membership talks.
The move could in theory put Croatia in line to join in 2007, when existing candidates Romania and Bulgaria are also hoping to join.
The commission declared that Croatia had fulfilled both the
political and economic criteria needed to begin EU membership
negotiations, and hailed its readiness
to co-operate with the UN war crimes tribunal at The Hague.
The tribunal wants to try retired General Ante Gotovina on war crimes charges, but Croatia has not handed him over.
The issue has been seen as likely to blight Zagreb's membership bid.
Enlargement Commissioner Guenter Verheugen said Croatia
was economically well set for membership.
"Croatia is better placed today that most of the countries
that will be joining on May 1," he said.
"The Croatian economy is strong, very strong, and in close
co-operation with the economy of the EU," he said.
Croatia would be the second former Yugoslav state to join the EU. Slovenia is among the 10 joining on 1 May.