(Adds Slovenia confirmation, European Commission, background)
By Zoran Radosavljevic
ZAGREB, March 7 (Reuters) - Slovenia has agreed it won't let a 20-year-old bank dispute stop Croatia joining the European Union as planned on July 1, the two countries' prime ministers said on Thursday.
The bank closed down when the two countries declared independence from Yugoslavia in 1991, without reimbursing its Croatian depositors.
Croatia's economy has floundered since the global credit crisis killed a property-based boom, and the country is banking on EU entry to revive economic growth.
EU Enlargement "Commissioner Stefan Fuele considers this to be a good deal for both countries and a good deal for enlargement," a Commission spokesman told reporters in Brussels.
Slovenian Prime Minister Janez Jansa said his country's parliament would be able to ratify Croatia's EU accession treaty "within 30 days" after signing the memorandum.
Croatia's Prime Minister Zoran Milanovic told a cabinet session: "The text of the memorandum has been agreed and I and Jansa will sign it on Monday."
Croatia concluded its EU accession talks in 2011 but its neighbour had refused to ratify its EU treaty because of the dispute over Slovenian bank Ljubljanska Banka (LB).
Croatian Foreign Minister Vesna Pusic said Croatia had now agreed to suspend a legal suit before its local courts, in which it is seeking reimbursement from Ljubljana.
Further talks between Croatia and Slovenia on Ljubljanska Banka will be held under the auspices of the Swiss-based Bank for International Settlement, Pusic said.
Slovenia is the only former Yugoslav republic to have joined the EU so far, in 2004. The Adriatic republic of Montenegro, Croatia's southern neighbour, is the only other state of the former federation that is in EU membership talks, while Serbia, Macedonia and Bosnia are further behind. (Additional reporting by Marja Novak in Ljubljana and Robert-Jan Bartunek in Brussels; Editing by Ruth Pitchford)