EU leaders agreed they would soon open talks with Serbia on joining the bloc, as they wrapped up a two-day summit that also freed up billions of euros to battle youth unemployment.
In what EU President Herman Van Rompuy hailed as a "productive" two days, leaders from the 27-country union said they would open accession talks with Serbia "by January at the latest."
At the same time, they adopted a mandate to start talks on a Stabilisation and Association Agreement with Kosovo, which may eventually pave the way for membership negotiations of its own.
The decision to start accession talks with Serbia was made possible after Belgrade made a pledge to normalise relations with its former breakaway province Kosovo.
In Belgrade, Serbian premier Ivica Dacic welcomed the decision as "final and historic", but said he wished talks would begin earlier than January.
Dacic aims to bring his country into the EU fold within four to five years, an ambitious target given the complexity of negotiations required to join the bloc.
More than 1,000 nationalists marched in the Serbian capital to protest against the government's "concessions" over Kosovo in order to win Brussels support.
"Serbian leaders are so spellbound with the European Union that they are betraying Kosovo for it," conservative opposition leader Vojislav Kostunica told the protestors.
In spite of Europe's long and debilitating crisis, eastern European states continue to bid to join the bloc of 500 million people.
Croatia will officially join at midnight on Sunday, becoming the first new arrival to the club since Bulgaria and Romania in 2007, and only the second member after Slovenia of the former Yugoslavia since its bloody break-up in the 1990s.
Van Rompuy described Croatia's impending accession as "truly an historic moment ... for your government, for the citizens of your country" as well as "a milestone for the region as a whole."
Croatian Prime Minister Zoran Milanovic said his country's journey to EU membership had been a long one, "with a lot of scrutiny, a lot of checks and balances, a lot of chapters."
But he vowed that Zagreb "will do anything and everything and beyond that to help and assist (...) our neighbours who are not members of the club yet," in a reference to Serbia.
Analysts said the EU's opening to Serbia and the accession of Croatia are key milestones for the once war-torn Balkans but Brussels is pursuing a more cautious strategy than in past enlargements.
British Prime Minister David Cameron saw it as "remarkable progress" that Balkan countries, which had been embroiled in a bloody war years ago, should now be lining up to join the EU.
"I think when we look across the Balkans and remember the terrible things that happened there not so long ago, it is remarkable progress that countries are now joining the European Union or are preparing to join the European Union with a sense of peace and stability," the British leader told reporters.
On the first day of the meeting on Thursday, the summit had freed up 8.0 billion euros ($10.4 billion) in a drive to bring down high unemployment among the continent's youths.
EU Commission President Jose Manuel Barroso said the decisions "will make a difference for our economies," insisting that the situation in Europe was "much better than a year ago."
But the summit was not all plain sailing as leaders had to scramble to prevent Cameron from derailing the meeting over the tricky subject of the bloc's seven-year budget.
Cameron ruffled feathers going into the summit with sabre-rattling on the 3.1 billion pound annual UK rebate from the budget won in 1984 by Margaret Thatcher.
Diplomats even accused Cameron of taking the summit hostage.
But the British leader painted it in a very different light, arguing he had fended off attempts to whittle down part of the rebate.
"In this town you have to be ready for an ambush at any minute," Cameron said, adding that accounting changes in how the rebate is calculated could have cost Britain 1.5 billion pounds (1.7 billion euros, $2.3 billion).
By contrast, EU diplomats insisted it was only a technical issue at the summit and the changes affected only 50 million euros at most.