Thousands of people joined celebrations across Croatia on Sunday night to mark the country's entry into the European Union, 20 years after it won its independence in a bloody civil war that shook the continent.

Croatia became the 28th EU member on Monday, the bloc's first addition since Bulgaria and Romania joined in 2007. It marked a historic turning point for the country, which went through carnage after declaring independence from the former Yugoslavia in 1991.

A decade ago, when Croatia started negotiating entry, it was overjoyed at the prospect of becoming a member of the European elite. But with the EU in financial turmoil and Croatia's own economy in recession for five consecutive years, the excitement has dimmed.

A large turnout was expected for celebrations across the country, including in the main square of the capital, Zagreb, where artists were due to perform for dozens of EU and regional leaders until midnight, when fireworks and the singing of Beethoven's Ode to Joy – the EU's anthem – were set to mark the official entry into the bloc.

Customs posts will be removed from Croatia's borders with EU neighbours Slovenia and Hungary, while EU signs and flags will be put on its borders with non-EU states Bosnia, Serbia and Montenegro.

But overall, the festivities were to be more modest and less jubilant than when Bulgaria and Romania – currently the EU's poorest states – became members. Croatia, with a population of 4.2 million, will be the third poorest country in the EU.

"There are not too many festivities because the general situation is not brilliant," the president, Ivo Josipovic told the Associated Press in a recent interview. "We have to develop our economy, take care of those people who are jobless now, and there is no time and money for big celebrations."

With an unemployment rate hovering at around 20%, plunging living standards, endemic corruption among its political elite and its international credit rating reduced to junk, many Croats are not in the mood to celebrate.

Some economists have warned that Croatia could seek an EU financial bailout as soon as it becomes a member. Croatia's foreign minister, Vesna Pusic, has rejected those claims, saying that the country would qualify for bailouts only if it is a member of the eurozone.

The president of the European parliament, Martin Schulz, described Croatia's accession as a historic day. "EU membership will offer no magic solution to the crisis," he said in a statement. "But it will help to lift many people out of poverty and modernise the economy."

The protest movement Occupy Croatia was planning an anti-EU march on Sunday evening, saying in a statement that "the European Union is not a solution to our problems".

"The entry into the European Union is an economic genocide over the people living in our country," the group said in a statement, blasting the EU as a "union tailored for rich corporations and their politicians".