"We are looking forward to Croatia's joining the European Union next year," Clinton said at a joint news conference with President Ivo Josipovic after their meeting.

Asked if, despite the problems with Slovenia, Croatia would join the EU next July 1 as planned, Clinton said Josipovic and Prime Minister Zoran Milanovic had assured her that Croatia would be prepared for membership.

Just as we have done so far, we continue to support Croatia's path to Europe, she said, adding that Croatia was an anchor in the region, a prosperous country that could serve as an example to its neighbours.

Speaking of the relations between the United States and Croatia, Clinton said they were tied by friendship and being part of the same cultural circle as well as by a strong partnership in Afghanistan and the region. She added that the US had been supporting the Croatian people on the road to Euro-Atlantic integration for 20 years now.

Clinton, however, was quite critical when asked about the investment climate in Croatia.

You are an excellent country for investments. You have a great geographical position and an educated workforce. But we encourage you to cut down red tape, continue with privatisation and facilitate the starting up of new companies, she said.

According to Clinton, the US is not doing this for itself but for Croatia, which she said must pursue economic reforms and become competitive in the Balkan and European markets. If those reforms are applied, US investors will recognise it, she said.

Clinton praised Zagreb for the fight against corruption, the strengthening of the rule of law, participation in a joint programme of housing provision for refugees with Serbia and Bosnia and Herzegovina, and for improving the status of Roma.

You have decided to be part of the peaceful and free Europe and transatlantic community. You serve as an anchor in the region, a prosperous country which can be an example to others, Clinton said, adding that she would like Zagreb to convey the lessons learned to its neighbours.

President Josipovic thanked the secretary of state for everything the US has done so that Croatia could make headway, come out of the war and establish itself as a modern country.

He told the press Clinton said US business people were very interested in economic cooperation, but conceded that there was "a problem of real openness to investments."

"The Croatian government is preparing a series of measures to make it easier for investors to come to Croatia. I am sure that a large number of US investors will be interested in that," Josipovic said.

He added that Croatia, as a future member of the EU, would work on the further stabilisation of the region, reiterating that the continuation of EU enlargement was a vital Croatian interest. "In the EU too we will do our best so that our neighbours are extended a hand of support and join us in the Union tomorrow."

Asked by reporters about the developments in Syria, Clinton called for a major overhaul of Syria's opposition, saying it was time to move beyond the Syrian National Council and bring in those who are "in the frontlines fighting and dying today".