ZAGREB (Reuters) - Croatia and Slovenia have reached a deal on a 20-year-old bank dispute which should allow Croatia to join the European Union on July 1, as scheduled, Croatian Prime Minister Zoran Milanovic said on Thursday.
"The text of the memorandum has been agreed and I and (Slovenian Prime Minister Janez) Jansa will sign it on Monday," Milanovic told a cabinet session broadcast on the Internet.
The Slovenian government was not immediately available for comment.
Croatia concluded its EU accession talks in 2011 but Slovenia has failed to ratify Croatia's EU access treaty, the only EU member to do so, due to a dispute over Slovenian bank Ljubljanska Banka (LB).
The bank closed down when the two countries declared independence from Yugoslavia in 1991, without reimbursing its Croatian depositors.
Croatian Foreign Minister Vesna Pusic said Croatia had now agreed to suspend a legal suit before its local courts, in which it is seeking reimbursement from Ljubljana, while Slovenia committed itself to a fast ratification of Croatia's EU accession.
"It is expected to do that by the end of March," Pusic told the cabinet.
That should allow Croatia to join the European Union on July 1 as planned.
Further talks between Croatia and Slovenia on Ljubljanska Banka will be held under the auspices of the Swiss-based Bank for International Settlement, Pusic said.
Slovenia is the only former Yugoslav republic to have joined the EU so far, in 2004. The Adriatic republic of Montenegro, Croatia's southern neighbor, is the only other state of the former federation that is in EU membership talks, while Serbia, Macedonia and Bosnia are further behind.
Pusic and Jansa's envoy, Tone Kajzer, have already initialed the memorandum outlining the Ljubljanska Banka deal, Croatia's foreign ministry said in a statement.
So far 22 EU members have ratified Croatia's accession treaty and four have started the process.
(Reporting by Zoran Radosavljevic; Editing by Susan Fenton)