Another year, another bout of unedifying squealing and squabbling about borders in the Western Balkans. This time it is two supposedly better-behaved children, Slovenia and Croatia, that are in dispute. While they have not come to blows (yet), there is much unpleasantness in the air, and the Slovenes are holding Croatian accession negotiations to the EU hostage as a result.
The argument is over the Gulf of Piran (of course, the name has now become controversial as well, with both sides arguing about what the real name should be) and the consequences of the break-up of Yugoslavia. This very clear map (http://commons.wikimedia.org/wiki/File:Bay-of-Piran_maritime-boundary-dispute.jpg) illustrates things better than I can describe, but essentially, in Yugoslav days, ships could sail from Slovenia through Yugoslav waters and reach international waters directly. With the break up of Yugoslavia, Slovenian ships would have to sail through another country's waters in order to reach international waters.
Both sides' positions appear to have oscillated back and forth since 1990, but currently Slovenia is insisting on having about 3/4 of the bay and a corridor to international waters, while Croatia would have an "exclave" of national waters on the other side of the corridor to maintain a maritime boundary with Italy (which is apparently not allowed under international law). This is the scenario depicted in the map link above.
Even if this situation appears highly favourable to Slovenia, the two governments initialled an agreement along these lines in 2001. However, the Croatian government was unable to obtain parliamentary support for the agreement, and the process has foundered since. As often happens, positions have hardened, with Slovenia insisting on the agreement being adhered to, and Croatia going back to the 50:50 option combined with the offer of unfettered access through Croatian waters for Slovenian ships.
Looking at this objectively, and from normal international law principles, I would say that Croatia has the more reasonable case here. The fact that Slovenia does not want to take this to legal arbitration suggests that they know this.
However, the Croatian position is weakened by the fact that their Prime Minister initialled the agreement in 2001 to hand over most of the bay to Slovenia. More fundamentally, the realpolitik means that Slovenia holds the upper hand as they are already in the EU and NATO and can block Croatian accession. Maybe one compromise option would be to go back to a 50:50 split of the bay but to combine that with a corridor for Slovenian shipping. Unfortunately, at the moment, compromise is not a word that is in wide circulation.