The publication of this dazzling, funny and deadly serious novel will bring nourishment to readers hungry for the best new European fiction, and to those wondering where the new generation of post-Yugoslav novelists are. Istros Books, a UK publisher of south-east European authors, previously brought us Seven Terrors by Selvedin Avdić and The Son by Andrej Nikolaidis, but that is where all regionally specific grouping must end, because Farewell, Cowboy doesn’t need it. It shines on its own – with the help of a flawless translation from Croatian by Celia Hawkesworth.

In her dust-choked home town on the Adriatic coast, where “the spring roses were expiring in the parks” and the graffiti reads “Stranger, the law does not protect you here”, twentysomething Dada is at a loose end. Her world is dismantled at every level: collectively, through the 1990s war; familially, through the presumed suicide of her brother; and personally, after the end of a relationship, an interrupted degree and the decision to quit “the only quasi-city in this wasteland” (Zagreb) and return to small-town life (Split) with her mother and the ghosts of unsolved troubles. One of these ghosts is her brother Daniel, a fan of cowboy films, who was much loved in the Old Settlement neighbourhood, and is now the subject of graffiti in a gutted building. Another ghost is the Yugoslav war, the toxic residue of which breathes from the pores of the listless olive-groved landscape and causes the neighbourhood women “who are more highly strung here and fierier than their weary husbands [to] fight so that their tits gleam and their teeth and kitchen knives flash”. The postwar kids all speak in the barbed, disillusioned voice of Dada and her sassy sister: “There’s something suppressed about the Old Settlement, like venereal disease of the brain.”

Olja Savičević and her characters’ generation grew up “in a depression, in a cleft between two houses”, and the murkiness of her brother’s death has undertones of neighbourhood vendetta, the legacy of a war that “had a way of making people’s ethnicity everybody’s business”. Their sexuality, too, it turns out. The novel’s ostensible narrative hook is Dada’s desire to untangle the circumstances around Daniel’s death, but her private quest morphs into something more convoluted, a journey into the dark passions of small-town life. Everyone is implicated, and a series of striking portraits emerge: the next-door “professor” with “his physical resemblance to a drowned man” and habit of keeping salamanders in formalin jars in his living room “the way people […] keep pictures of their closest relatives”; the disabled old aunt from childhood dubbed “the insatiable one” by the kids because of her lubriciousness; Maria the slow-witted Gypsy from the slums who loved Daniel, a rare untainted soul; Mum with her poignant “Hollywood smile” who lives on a diet of TV and antidepressants; Angelo the gigolo (“there’s something about beautiful people that suggests a deceptive good fortune”) who grew up a war orphan and now seduces tourists in bars. There is never a slip into sentimentality, pathos, or freak-show indulgence – Savičević is too gifted a satirist for that, and too fine a poet. In perfectly pitched prose that almost moves on the page, she gives us the pulse of the land where “in the saturated darkness silver and gold veins explode, minerals crackle, mandrake roots scream, while dead occupiers rearrange their bones”. In one painfully comic scene the local gangster gives a glitzy party to celebrate his new hotel, complete with Balkan turbo-folk and a roast donkey: “And everything fell into oblivion, into a shallow dish full of fat.”

Savičević has a rare ability to speak of the deadly serious with a hedonistic lightness that lures you into a spirit of abandon, only to go on to deliver breathtaking blows of insight. “Mum” never speaks of her sorrow. Instead, when she goes missing one night, Dada reflects: “People who have been lucky talk about the worst and the best days of their life. We who have been less lucky don’t talk about that.” The deliberately garish “western” section in the middle of the story, where a complacent foreign film crew come to shoot a cowboy scene cheaply in the dusty Balkans, suddenly tips into nightmare. The blood is never just make-believe, Savičević suggests with chilling breeziness, and anyone who believes that cowboy films, children at play or people in love are innocent is one of the lucky ones. With this novel, which lodges itself in your chest like a friendly bullet, a glorious new European voice has arrived.

• Kapka Kassabova’s Twelve Minutes of Love: A Tango Story is published by Portobello. To order Farewell, Cowboy for £7.99 (RRP £9.99) go to bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99.

