* Croatia likely to complete EU accession talks in months
* Strong push on anti-corruption reforms seen positive
* Concern about Croatian judiciary remains
By Justyna Pawlak and David Brunnstrom
BRUSSELS, May 19 (Reuters) - Croatia is likely to complete its accession talks with the European Union later this year thanks to a revival of judicial reforms, but appears set to miss its June target, EU diplomats say.
Croatia would become the second former Yugoslav state, after Slovenia, to join the wealthy bloc and would start benefiting from billions of euros of EU structural aid to upgrade its developing economy.
Its bid has been bogged down largely by European concern over its pervasive corruption and over Zagreb's willingness to come to terms with its role in the 1990s ethnic Balkan wars.
But diplomats in Brussels say a reform push in recent months is yielding results and has convinced more EU governments that Croatia may be ready to finalise its talks soon.
"The Croats are making a serious effort and Croatia is well on its way to finalise negotiations," one EU diplomat said.
"June is out of the question but July is possible, provided the European Commission is convinced they have met all the benchmarks," he added.
Another diplomat said he expected the talks to be completed in the second half of 2011.
Recognising Croatian progress in reforming its judiciary, the 27 EU governments will discuss the state of negotiations next week.
Finalising talks this year could allow Croatia to join the European Union as soon as 2013.
DIFFICULT STEPS
Croatia still faces several obstacles, and an important signal about its prospects could come in early June, when a United Nations prosecutor issues his regular report on Croatia's cooperation with a war crimes tribunal investigating former Yugoslavia. A negative assessment could brake progress.
Zagreb suffered a setback in March, when the executive European Commission issued a scathing report on its judiciary reforms, expressing concern about their impact.
Three months later, diplomats say questions remain about progress in several areas, such as establishing a track record for hiring independent judges and prosecutors, cutting a backlog of court cases and making final judgments in graft cases.
"They may not have had enough time since March to establish a sufficient track record yet," one diplomat said.
EU governments are wary of being lax towards Croatia, having been stung by the accession experience of Romania and Bulgaria, whose anti-corruption efforts dwindled significantly after the two Balkan states joined the EU in 2007.
The EU is torn between the need to sound tough on corruption and the wish to achieve its western Balkans policy goals, as delays over Croatia could be seen as a weakening of EU interest in the region.
Entry talks with the EU involve agreement on more than 30 policy areas, known as chapters. Croatia has closed 30 out of 35 needed.
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