Prime Minister Tihomir Oreskovic said on Friday he was not going to resign, urging his deputies, Tomislav Karamarko and Bozo Petrov, to step down so that the government could continue its reform programme.

"I am not resigning, nor did I plan to resign," Oreskovic told a press conference, thanking everyone for their support in recent days. He said he had taken up the post of prime minister for the benefit of citizens and would remain in office until the end of his term.

Oreskovic said that relations between Karamarko and Petrov had become too great a burden for his government and the country. He said that over the last few days he had made great effort to get them to mend their relations, but to no avail.

"I call upon Mr Karamarko and Mr Petrov to resign in national interest so that the government can continue implementing reforms as we can already see their results," Oreskovic said. This will help stabilise the government so it can carry out the promised reforms and get the country out of the crisis, he added.

The prime minister said that in order to reduce public debt the government on Friday activated the sale of Koncar Electrical Industries for 360 million kuna (48 million euros).

Commenting on media reports about a possible early election, Oreskovic said that that would not be in the country's interest because it would cost between 1 and 2 billion euros. He said that Croatia now had a good foundation on which it could grow, adding that he was confident that if the political situation stabilised this could be an excellent year for the country because all indicators were positive.

"This will be a fight for Croatia and I hope that in the end people will make decisions that are in the best interests of the country and the people," Oreskovic said.

The prime minister warned that the present political situation had begun to threaten vital national interests, as could be seen in a failed attempt to issue Eurobonds in London this week. He said he personally had decided to delay their sale because it would not be in national interest and that he had told Finance Minister Zdravko Maric that Croatia could get better terms in July.

"As a former financier, I can say that that was the best decision for the country," Oreskovic said.

He said that Thursday's government session was cancelled because he had an urgent meeting with officials from the Security and Intelligence Agency (SOA). He said he could not discuss details of the meeting.

Oreskovic also said that the curriculum reform was continuing because it was one of the crucial reforms and he wanted it to proceed at a quicker pace.

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