There was much optimism as Croatia enjoyed its first days as a member of the European Union .

(SOUNDBITE) (Croatian) PENSIONER FROM ZAGREB, MIRKO IVANCAN, SAYING:

"Anything is possible, it is possible that we end up doing well, which is what I would like, for my people, and also for those who accepted us, with all the difficulties."

And there are lots of difficulties

The country has been stuck in recession for the last four years.

Its national debt is officially classed as junk and one in every five people are unemployed.

Peter Sanfrey from the European Bank for Reconstruction and Development says EU membership should help.

SOUNDBITE: Peter Sanfey, EBRD, saying (English):

"It's a country with a lot of potential, it's going through a difficult economic situation at the moment like its neighbours but I think with membership now this will give it a boost that over the medium to long term will bring benefits."

Croatia has already implem