( CNN ) -- Croatia formally became the newest member of the European Union on Monday , marking an end to a 10-year campaign for a Balkan state that emerged from the ruins of a bloody civil war . The celebrations began as the clock struck midnight Sunday . Fireworks lit the sky in the capital Zagreb , a choir sang `` Ode to Joy '' and thousands clinked champagne glasses and erupted in cheers . `` Welcome to your union , welcome to our union , '' EU President Herman Van Rompuy told the crowd . The nation of 4.4 million people is the 28th member of the EU , and the second Balkan country that rose out of the ashes of Yugoslavia to join the union . Slovenia became a member in 2004 . `` Whatever anyone is saying about us , you should know we are a country of rational people who are realistic about themselves and their country , and the role of their country in Europe and the world , '' Prime Minister Zoran Milanovic told the crowd . Croatia looks to oil and gas fields in Adriatic Sea . Many challenges . With a low credit rating of junk and a political class stained by accusations of endemic corruption , Croatia 's challenges are unlikely to disappear overnight . It is three years into a debt crisis that is plaguing countries across southern Europe . One of the challenges facing Croatia is its growth prospects . The financial crash of 2008 brought about a harsh double-dip recession that left the country 's economy lingering in the doldrums . Last year , unemployment peaked at 17.3 % which is behind only Greece and Spain , according to Eurostat - the European Commission 's data archive . `` The EU will not be a panacea for Croatia 's economy , '' Will Bartlett , a senior research fellow at the London School of Economics , told CNN in January . Fighting corruption . Croatia is also in the midst of cleaning up a political class that is rife with corruption . Since the country 's inception in the early 1990s , it has struggled to choke off profiteering from those in positions of power . Transparency International - an organization tackling corruption -- ranked Croatia below Rwanda , Jordan and Cuba in its Corruption Perceptions Index for 2012 . But the country still came in above Italy - Europe 's third largest economy . `` The country 's evolution has been very slow since 1990 , '' said Zorislav Petrovic , head of Transparency Internernational in Croatia . But the current government - led by Milanovic - is taking steps to clean up the country 's act under close supervision from the European Union . In November , the country 's former Prime Minister , Ivo Sanader , was jailed for 10 years after being found guilty of taking pay-offs from foreign companies . Sanader - who was premier from 2004 to 2009 - had fled the country but was arrested in Austria . Kristof Bender , deputy chairman of the policy institute , European Stability Initiative , says Croatia 's progress to the `` doorstep of the European Union '' is quite remarkable . `` We must n't forget how bad it was in the 1990s , '' Bender said . `` The darkest moments of war , occupation , mass killings , ethnic cleansing , and autocratic leadership and crony capitalism were all there . '' European Union , Turkey avoid rupture in relations .
` ` contribution to our union , '' a spokesman says . Croatia is facing several challenges . ` ` The EU will not be a panacea for Croatia 's future , '' an analyst says .