Croatia's tourism minister resigns over land transaction

Sat Mar 9, 2013 8:04am EST

* Croatia due to join European Union in July

* Ostojic says accusations unfounded

ZAGREB, March 9 (Reuters) - Croatia's tourism minister resigned on Saturday over media accusations his family made a large profit from a land sale after a change in planning law in the region he represents.

Veljko Ostojic is the fourth minister in the centre-left coalition to step down since it took power in December 2011.

However, while the resignations are a blow for a country struggling to recover from four years of recession ahead of joining the European Union, they do not pose a threat to the government.

"After a talk with the Tourism Minister Veljko Ostojic, Prime Minister Zoran Milanovic accepted his resignation. The coalition government imposed high ethical standards and will stick to them," the prime minister's office said.

According to media reports, Ostojic's sister-in-law earned some 25 million kuna ($4.29 million) on a land her company bought and then sold after changes in urban planning in the Adriatic peninsula of Istria, which is dominated by Ostojic's regional party IDS, which is a member of the national coalition.

Ostojic said he had known about the transaction, but was not involved in it nor took any money from it.

"I resign due to the pressures on me in recent days which are based on unfounded accusations and lies. Such a negative campaign against me makes it impossible to carry on working in a professional manner," Ostojic said in a statement.

It was not immediately known who will replace him.

Tourism is one of the most important industries in a country that will join the EU on July 1. It accounts for almost 20 percent of Croatia's gross domestic product.

Croatia's efforts to fight crime and graft are being carefully monitored by Brussels before it formally joins the bloc.

A deputy prime minister resigned after being sentenced to jail after causing a fatal car crash in Hungary, and the environment minister stepped down after the media said she asked the head of the state railway company to keep the wife of a party colleague in her job.

The former transport minister cited health reasons for stepping down. ($1 = 5.8322 Croatian kunas) (Reporting by Igor Ilic; Editing by Alison Williams)

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