"Croatia has adopted a rational, sensible and responsible budget. This, in parallel with showing social empathy for the weaker and those in need of help, is the only way to move forward and in that sense there is no difference between the left and the right," Milanovic, leader of the Social Democratic Party (SDP), said in Brussels on Thursday after attending a meeting of the Party of the European Socialists (PES), who met in Brussels ahead of the start of a two-day European Union summit meeting.

The Croatian PM will attend as an observer the summit meeting that will focus on models to encourage growth and employment in conditions of fiscal discipline.

On Friday, leaders of 25 EU members will sign a fiscal compact which virtually bans budget deficits.

"The fiscal treaty will be signed tomorrow, and this is an entirely new thing, with possible legal actions against those who are breaching the rules. Spending will be controlled, there will be no wasting of money, and in that framework only those most capable will ensure growth and investments. We believe that Croatia is among such countries, but we will need a lot of patience, a lot of responsibility and prudence," Milanovic said.

The PM said he believed that Serbia would be given the status of a candidate country at the summit scheduled to begin later on Thursday.

"It's about time. They (Serbia) have met the requirements. It is in our interest to see the process start as soon as possible and be brought to a conclusion in a reasonable time frame, as it brings about stability and security."

Asked to comment on Croatian Democratic Union (HDZ) leader Jadranka Kosor's statement that her cabinet deserved credit for the maintenance of Croatia's credit rating, Milanovic said briefly, "That government had no success and our successes are yet to come".