June 3, 2016 / 12:32 PM / a year ago

Two deputies to Croatian PM reject his call to resign

Croatia's Prime Minister-designate Tihomir Oreskovic, new First Deputy Prime Minister Tomislav Karamarko and new Deputy Prime Minister Bozo Petrov (R-L) seek approval for the new government in the parliament in Zagreb, Croatia, January 22, 2016. REUTERS/Antonio Bronic

ZAGREB (Reuters) - Croatian Prime Minister Tihomir Oreskovic urged his two deputies on Friday to resign over a political dispute in which they are both embroiled so that the government can press ahead with crucial economic reforms, but they rejected his call.

An alleged conflict of interest involving Tomislav Karamarko, head of the biggest party in the ruling coalition, the conservative HDZ, has brought the four-month-old government close to collapse..

Bozo Petrov, the other deputy premier who heads “Most” (Bridge), a small reformist party in the coalition, has been pressing Karamarko to quit.

“Relations between Karamarko and Petrov became too big a burden for the government. That’s why I call upon them to withdraw so that the government can continue working on reforms as we are already seeing results,” Oreskovic, a technocrat prime minister, told reporters.

Karamarko and Petrov rejected Oreskovic’s appeal, and the former said the prime minister had lost confidence of the HDZ.

“We think it would be a good solution if Oreskovic resigned. We think now that a solution is a new majority in the parliament. We prefer that to snap elections as we would lose precious time,” Karamarko told reporters. He said Most would not find a place in a new government with the HDZ.

Most’s Petrov, however, said he was ready to resign if it meant stability for the country and insisted on Karamarko stepping down.

It remains unclear whether the HDZ could muster a new majority at all. “It is possible, but even then the government would hardly be stable. The new elections in the autumn are a realistic option,” political analyst Davor Gjenero said.

Croatia this week put on hold an international bond worth one billion euros ($1.12 billion) due to its political crisis.

“I decided to stop the sale as I did not want us to pay an additional premium for this political risk. I believe that maybe already next month we could achieve better terms. At the moment it is clear that this political situation has started to threaten key national interests,” Oreskovic said.

He added he did not plan to resign as some local media have recently speculated.

The Croatian parliament is due to hold a no-confidence vote over Karamarko’s alleged conflict of interest by June 18.

The government of the newest European Union member country has vowed to pursue reforms - including fiscal consolidation and cutting red tape - to spur growth and cut high public debt.

Snap elections would delay reforms and not guarantee coalition stability, Gjenero said.

Reporting by Igor Ilic; Editing by Mark Heinrich

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