BRIEF NEWS BULLETIN NO. 7116

INTERIOR MINISTER SAYS SECURITY SITUATION GOOD, BBC CLAIMS UNTRUE

"To judge the security situation in Croatia on the basis of two murders of six months ago, which have virtually been solved, is malicious," Karamarko told the press after talks with Bavarian Interior Minister Joachim Herrmann.

He said that statistical data testified to the good situation and that, although unpopular, they showed that serious crimes and murders dropped from 2008.

The British Foreign Office has warned Britons that there is a threat of terrorism and organised crime in Croatia, saying that tourists could be targets of attacks because they are unselective and could happen at places with foreign tourists.

BBC Radio 4 aired this warning on Thursday in a feature called "Croatia cursed by crime and corruption", corroborating it with last autumn's murders of journalist Ivo Pukanic and lawyer Ivana Hodak in Zagreb.

Karamarko also commented on the scandal over the purchase of army trucks, saying that this was a corruption and organised crime case in which the police investigated what they had been asked to.

Asked if the police had started investigating problematic voter lists in Split-Dalmatia County, ahead of next month's local elections, Karamarko said they had.

POLICE OFFICIAL SAYS TOURISTS IN CROATIA SAFE

"We believe that those concerns are unjustified because the safety of tourists in Croatia is at a very high level, as evidenced by police statistics," said the head of the Police Director's Office, Krunoslav Borovec.

Borovec added that there were around 9.4 million foreign tourists in Croatia in 2008, of whom 3,481 were victims of crime.

The police official said that the crimes in question were mostly less serious types of crime, such as theft, and added that the number of criminal acts was insignificant in relation to the number of tourists visiting Croatia.

The number of criminal acts targeting foreign nationals has been falling by the year, in 2005 there were 4,630 such acts, and in 2008 there were 3,481, said Borovec.

Last year, 2,773 foreign nationals were victims of theft, 52 were seriously injured, 45 were exposed to threats, and 30 were victims of robbery. There were two cases of rape and nine cases of murder.

Sixty-four foreign nationals were killed in traffic accidents on Croatian roads, and most of the victims were Slovaks (15), followed by nationals of Bosnia-Herzegovina (11), Serbia (9), and the Czech Republic (6). Three nationals each of Turkey, Netherlands and Austria were killed in traffic accidents as well.

Police figures also show that 34 foreign nationals drowned last year. Most of the victims were Slovaks, Germans and Czechs.

However, foreign nationals visiting Croatia were not only victims of crime. In 2008, 3,025 foreigners committed crimes. Most of them were charged with drug abuse, customs evasion, theft, and document forgery.

Two foreigners were charged with murder, 29 with infliction of grievous bodily harm, and nine with rape.

THE ECONOMIST: HOPES OF EARLY EU ACCESSION RECEDE IN CROATIA

Unlike Albania, which celebrated its recent admission to NATO with gusto, glum Croatia did little more than issue a NATO postage stamp, says the author of the article.

The reason for this are bad economic forecasts, the author says, quoting Goran Saravanja, the chief economist of Zagrebacka Banka, as predicting that in 2009 GDP would shrink by 3.7% and unemployment would rise sharply, as well as the Slovene blockade of Croatia's EU membership talks.

"The Croats still hope to join the EU in 2011, but unless Slovenia gives ground in the next few months, any chance of meeting that date will vanish."

The author gives a brief background of the Slovene-Croatian border dispute, adding that Croatia wants the matter settled by the International Court of Justice, but Slovenia does not.

The author goes on to say that EU Enlargement Commissioner Olli Rehn suggested arbitration on March 25, but neither side has accepted this proposal.

"With local elections due on May 17th and a presidential campaign starting by the end of 2009, the Croatian government is in no mood to compromise," the author says, adding that some officials hope the pressure may start to build on Slovenia instead.

The article also points to the fact that concessions offered by the EU to the Irish to secure a yes vote to the Lisbon treaty this autumn could be enshrined legally in Croatia's EU accession treaty, which has to be ratified by all existing members.

"If so, a Slovene veto would obstruct the entire EU, not just Croatia," reads the article.

"For now, standing up to Slovenia is helping to distract attention from a string of corruption scandals and a worrying number of gangland-style killings that have shocked public opinion. Croatia is plagued by corruption, notes one commentator, Denis Kuljis, who adds ruefully that the public do not grasp the links that exist between gangsters and some in the political elite."

Even without the Slovene problem, Croatia has a lot still to do to satisfy Brussels. One big difficulty will be a reform of shipbuilding, which employs as many as 17,000 people, but survives only with huge subsidies, reads the article.

"If there is any good news, it is that Croatia may weather the financial crisis better than some of its neighbours," says the author, adding that Croatian Prime Minister Ivo Sanader in March started to mend relations with Serbia in the hope that Serbian tourists would "avert a bad year for Croatian tourism".

However, that may not be enough because, "today many Serbs prefer somewhere like Turkey, not because they fear that a Croat with a wartime grudge may smash their windscreen, but because it is cheaper. No wonder an air of despondency hangs over Croatia."

CROATIAN AND BAVARIAN INTERIOR MINISTERS MEET IN ZAGREB

The two ministers said that the Croatian and Bavarian police had established good cooperation, particularly in combating organised crime, and that they wanted to further deepen it.

Karamarko said that the relationship between the Croatian and Bavarian police was excellent, both in exchanging information and staff training.

Hermann said he could not agree with Thursday's report by the BBC that Croatia is an unsafe country.

"Internal security is something Croatia is coping well with and is working on fulfilling the European Union membership requirements," Herrmann said, adding that Croatia would be admitted to the EU as a full member in 2011 and that it would have Bavaria's full support on that path, as had been the case so far.

SANADER RECEIVES BAVARIAN INTERIOR MINISTER

Sanader said this visit was important for further strengthening the friendship and cooperation between Croatia and Bavaria, which he added had excellent relations.

Sanader briefed Herrmann about the priorities of Croatia's foreign policy, the state of accession negotiations with the European Union, and Croatia's role in the region.

Herrmann congratulated Croatia on its recent accession to NATO and said Bavaria supported Croatia's EU accession. He underscored the importance of the cooperation between the Croatian and Bavarian police forces in dealing with organised crime, and was hopeful that his visit would help further develop and intensify this cooperation.

EHRENKRONA: SWEDEN SUPPORTS CROATIA'S EU MEMBERSHIP BID

Sweden has traditionally been one of the proponents of EU enlargement and still is, Ehrenkrona said in a lecture on "The EU and globalisation - challenges of the Swedish presidency of the Union", held at the Faculty of Political Sciences in Zagreb.

Ehrenkrona said that Croatia's EU accession negotiations would be among the priorities of the Swedish presidency.

We are looking forward to cooperating with Croatia. We will try to complete negotiations with Croatia at least technically if possible, he said. Although we are running late, we believe we can make considerable progress on most issues, he added.

Speaking of the Slovene blockade of Croatia's accession negotiations over their border dispute, Ehrenkrona said Sweden believed that bilateral issues should be separated from the negotiating process.

It is necessary to find a solution that will be acceptable to both parties, he said, adding that one should not lose sight of what is the most important and that is Croatia's aspiration to become a full EU member.

We hope to be able to welcome Croatia as an EU member in the not so distant future, Ehrenkrona said.

On the subject of the priorities of the Swedish EU presidency, Ehrenkrona cited the present financial and economic crisis, the fight against climate change, the Baltic strategy, the strengthening of trans-Atlantic ties, relations with China, and the Eastern Partnership with former Soviet countries.

MESIC: REHN'S LATEST PROPOSAL MAKES NO SENSE

According to unofficial information and media reports, the proposal provides for ad-hoc arbitration involving five arbitrators -- one to be appointed by Slovenia and Croatia each and three by the European Commission.

"I think it makes no sense. If Slovenia and Croatia each propose one arbitrator, then the International Court of Justice can propose the other three," Mesic said on Friday at a traditional reception for members of the Slovene-Croatian Friendship Society.

"The dispute concerns facts and facts are dealt with by a court. Facts should be established by a court and Croatia will accept what the court rules," he added.

Mesic said that things should not be further complicated by something that is solvable. "There can be no selective application of law. If we insist on the rule of law in our respective countries, we demand the same in international relations. Why should anyone be afraid of the rule of law?"

Mesic said that the unresolved issue between Slovenia and Croatia should not be allowed to affect ordinary people in the two countries.

"Sooner or later Croatia will accomplish all its strategic goals. Slovenia helped us accomplish one of them and that is to become a member of NATO," Mesic said, adding that the two countries, their people and companies need to cooperate.

"We should not allow transient matters to hamper our cooperation. There are many things that bring us together, while there are none that separate us," he added, stressing that the outstanding issues should be left to be dealt with by the political elites in Croatia and Slovenia.

Mesic traditionally hosts the Slovene-Croatian Friendship Society on St George's Day, the feast of spring.

Those present were also addressed by the Slovene Ambassador in Zagreb, Milan Orozen Adamic, who expressed hope that Slovene-Croatian relations would move forward in the spirit of St George's Day -- "the time of spring, bloom and optimism".

SANADER EXPECTS HDZ TO BENEFIT FROM BUDGET REVISION, NATO ACCESSION, IMF ASSESSMENT

Sanader was speaking to reporters in Osijek, where he came after opening a highway section along the pan-European road corridor 5c and where he met with Osijek Mayor Anto Djapic and members of the city government to discuss local projects.

After the closed-door meeting, the PM said that Osijek was developing well and that it had a good chance of becoming one of the most successful cities in the country.

He added that he supported the local coalition between the HDZ and the Croatian Party of Rights (HSP) and Djapic as candidate for Osijek mayor.

When asked to comment on claims that the recession was being felt the most in Slavonia, Sanader said that the recession was having an equal effect on all parts of the country and that the government's anti-recession measures would produce results if implemented properly.

Commenting on his forthcoming meeting with Slovene PM Borut Pahor, Sanader said he did not expect the meeting to solve the issue of the Croatian-Slovene border dispute, adding that the purpose of the meeting was dialogue.

"The meeting will not focus on the border, but on the lifting of (Slovenia's) blockade of Croatia's EU accession talks."

Asked to comment on an article in the British media that Croatia is an unsafe country for tourists, Sanader said the article was untrue, that the number of British tourists visiting Croatia had been growing by the year and that they could have seen for themselves that Croatia was the safest country in Europe.

Asked why he met with President Stjepan Mesic today, Sanader said that they met for regular consultations and that today's meeting focused on the situation regarding Slovenia.

Sanader reiterated that Croatia insisted on separating its border dispute with Slovenia from its EU accession talks, of which he said Foreign Minister Gordan Jandrokovic would inform EU Enlargement Commissioner Olli Rehn in detail at a meeting on Monday.

HNS SUPPORTS JOSIP KREGAR AS CANDIDATE FOR ZAGREB MAYOR

"The HNS believes that Zagreb needs a change of the Bandic-Holjevac-Sanader government and it is our responsibility to initiate that change. It is more important than having one's own candidate at any cost," HNS president Radimir Cacic told reporters in the party's offices.

Cacic also said that the HNS had no problem with the Social Democratic Party (SDP), with which it has formed coalitions in almost all counties for the coming local elections. "Bandic (the current SDP mayor of Zagreb) is the problem, not the SDP," Cacic said.

Also today, representatives of seven parties - the SDP, HNS, IDS, HSLS, HSS, ARS and the SDA - signed a coalition agreement for the local elections in Rijeka, calling the coalition "Your Rijeka".

The coalition's joint candidate for the post of Rijeka mayor is Vojko Obersnel of the SDP, and candidates for his deputies are Zeljko Jovanovic of the SDP and Miroslav Matesic of the HNS.

Obersnel said that the coalition best reflected the essence of Rijeka's identity - tolerance and openness.

SDP AND HNS IN ZADAR FORM COALITION AHEAD OF LOCAL ELECTIONS

The president of the SDP branch in Zadar and candidate for mayor, Ingrid Anticevic-Marinovic, said that one of the first steps the coalition would take if it won the elections would be to establish an anti-corruption council comprised of members of the public to supervise employment and awarding of contracts in the city.

NEWLY BUILT OSIJEK-DJAKOVO SECTION OF MOTORWAY FORMALLY OPENED

The cost of construction of the Osijek-Djakovo stretch was HRK 2.2 billion exclusive of Value Added Tax. The work was carried out by 15 contractors, which also built three viaducts, eight bridges, 17 overpasses and one underpass, as well as two rest stops and the Traffic Control Centre.

The Beli Manastir-Osijek-Svilaj motorway will be 88.6 kilometres long and is a part of the pan-European transport corridor 5c stretching from Budapest to the southern Croatian Adriatic port of Ploce.

Addressing the opening ceremony, Sanader said events of this kind confirmed that such large infrastructure projects were feasible even in time of a global economic crisis. He said that construction of the motorway towards Beli Manastir and Svilaj would continue.

Deputy Parliament Speaker Vladimir Seks said that by building the new stretch of the A5 motorway, the government delivered on its promise to connect the eastern and the coastal part of the country with a highway and to include eastern Croatia into pan-European transport corridors.

Transport and Infrastructure Minister Bozidar Kalmeta recalled that 501 kilometres of highway had been built in Croatia since 2004.

The CEO of the Hrvatske Autoceste highway construction and maintenance company, Jurica Prskalo, said that 70 per cent of the Croatian part of Corridor 5c was now completed and that Croatia now had 1,224 kilometres of highway.

LOAN AGREEMENT SIGNED FOR RIJEKA GATEWAY II PROJECT

The project is worth EUR 88 million. The World Bank has approved a EUR 84 million loan backed by government collateral, while the remaining EUR 4 million will be secured from the state budget. The loan is to be repaid over a period of 23 years, with 10 years' grace.

Most of the loan, about EUR 70 million, will go towards construction of terminals and a wharf, while the rest will be spent on upgrading services. The terminals are expected to be completed in about two and a half years and the wharf in about three and a half years.

Rijeka Gateway II is the continuation of the Rijeka Gateway project, which was also financially supported by the World Bank. The purpose of the project is to improve the competitiveness of Rijeka as a port city strategically located at the start of Corridor Vb, one of the most important pan-European transport routes.

Suker said that a EUR 100 million loan had been arranged with the World Bank for the Croatian Bank for Reconstruction and Development, adding that the loan was designed for entrepreneurs.

In order to continue to receive assistance from the World Bank, the government has to implement structural reforms, Suker said, adding that Croatia was coping well with the present problems.

Horvai said that by 2014, when the Rijeka Gateway project is to be completed, Rijeka would have one of the most important container terminals in the region.

CROATIAN AMBASSADOR ADDRESSES INVESTMENT SEMINAR IN JAPAN

Stambuk said that in times of crisis it was necessary to recognise new opportunities and was hopeful that representatives of Japanese companies would appreciate the possibilities Croatia was offering.

Stambuk stressed that Croatia was increasingly popular among Japanese tourists, saying that about 144,000 visited last year, two-thirds more than in 2007 and nearly five times more than in 2005.

The seminar was attended by 60 representatives of Japanese companies and was organised by the Croatian Embassy, Croatia's Trade and Investment Promotion Agency, and the Japan Institute for Overseas Investment.

CREDIT PROGRAMME LAUNCHED TO PROMOTE RURAL TOURISM

Bajs said the contracts offered very favourable terms, providing for an interest rate of eight per cent, six per cent of which will be subsidised by the Tourism Ministry.

Entrepreneurs interested in promoting rural tourism on their family farms can apply for loans of between EUR 10,000 and 300,000 with a repayment period of 15 years and a grace period of up to two years.

The contracts were signed on the Kezele farm in Sumecani near Ivanic Grad, about 30 kilometres east of Zagreb.

ECONOMIC COUNCIL DISCUSSES GOVERNMENT GRANTS, NON-TAX LEVIES

The Register of Government Grants is the first step in making a register of users of government grants and the starting point for planning and efficiently implementing the policy of government grants, the statement said.

The Economic Council was also acquainted with a register of 245 types of non-tax revenues and legal grounds for their collection, of which most refer to revenues of municipalities, towns and extra-budgetary users.

The Council proposed that the Finance Ministry and the Croatian Employers Association establish priorities and analyse with individual ministries and users the fiscal effects and propose concrete solutions for a possible reduction of some of the non-tax duties.

The Economic Council believes that both topics represent the beginning of a permanent goal of relieving the business sector of some of the non-tax levies in order to increase its competitiveness on the domestic and foreign markets.

MOODY'S DOWNGRADES CROATIA'S LOCAL CURRENCY RATING TO BAA3

"The decision to downgrade Croatia's local currency government rating reflects Moody's opinion that the Croatian authorities' response to the deterioration in the growth and budget outlook has been lagged and likely inadequate and that the process of unifying our local currency and foreign currency bond ratings would be unlikely to end up in their converging at the higher rating," said Anthony Thomas, Vice President-Senior Analyst in Moody's Sovereign Risk Group.

The Croatian government recently announced a package of spending cuts with the aim of limiting the budget deficit this year to 1% of GDP, but Moody's believes that the revised -2% growth forecast may still be too optimistic and so the budget deficit outturn would be quite a bit larger than the government projects. Accordingly, a further round of budget adjustments is likely to be required.

Moody's says Croatia's main vulnerability is its large and highly compressed external debt - roughly a third of which matures this year - and a heavily euroized banking system.

"This close linkage between the government's fiscal situation and its potential to spill over to exacerbate the country's external vulnerabilities means there is no longer a justification for the gap between the government's local currency and foreign currency debt ratings for Croatia," says Thomas.

He also points out that Croatia lacks an explicit external anchor as it is not yet a member of the European Union and has not sought IMF assistance, nor does it want to. However, as an EU candidate country with strong connections to core Europe, EU assistance would likely be forthcoming to supplement IMF financial support should the situation change.

Aside from the downgrade of the government's local currency debt rating, no other ratings were changed.

Croatia's country ceilings remain unchanged at A1 for foreign currency debt and Ba1 for foreign currency deposits. The local currency country ceilings remain Aa1 for debt and A1 for bank deposits. All outlooks are stable, says Moody's.

HANDA SHOWS INTEREST IN RECAPITALISING JANAF

"HANDA has expressed an interest in purchasing 26.2 per cent of the Company's equity, whereby it would acquire 264,812 ordinary shares at a nominal price of HRK 2,700," the company said, adding that it had received HANDA's letter of intent on April 15.

JANAF said it would consider the offer.

Trading in the JANAF stock was halted on Thursday and Friday because its price exceeded the limit. On Thursday, the company ended the trading day at HRK 1,499, up 7.07 per cent from Wednesday, generating a turnover of slightly over HRK 62,000.

PUBLIC SERVANTS' UNIONS ANNOUNCE PROTEST RALLIES FOR APRIL 21-24

The protest rallies will be held in Osijek on April 21, in Rijeka on April 22, in Zagreb on April 23, and in Split on April 24.

The rallies will be attended by representatives and members of unions of workers in the education, science, health, culture and social welfare sectors, which cover around 70% of the 180,000 public sector employees.

After that, all public servants' union branches will hold a referendum on April 27-29 to see if their members are willing to take part in a strike to protect the price and dignity of their work.

If supported by a majority, the strike will be organised between May 11 and 15 and is likely to be a combination of strikes and protest rallies, to last until workers' demands are met.

Public servants' unions cannot reconcile with a cut in their salaries, which is what the government recently decided to do, after failed negotiations, by sending to parliament for adoption under urgent procedure a bill on base pay in public services which allows the government to reduce the basic salary in the public sector to the 2008 level.

The unions claim that the bill will make salaries in public services again start to lag behind salaries in the business sector, which is why they demand that the cost of labour in public services be determined and that public servants' salaries be adjusted to the salaries in the business sector.

The unions of public servants say that they are ready to share the fate of other workers in the current time of crisis and to have their salaries reduced, but want to make sure that they will be compensated for the salary cut once the crisis is over.

AVERAGE NUMBER OF EMPLOYED IN 2008 AT 1.55 MLN

The average number of employees in corporate bodies was 1,252,089, there were 264,672 people employed in small businesses and free-lancing as well as 38,044 insured farmers.

The average number of active workers in 2008 was 1,791,546, there were an average 236,741 jobless people, while the average unemployment rate was 13.2%.

Monthly statistics reveal that unemployment was highest in January (261,700) and in February (260,100), and lowest in July (219,700) and August (219,300).

The registered unemployment rate was highest in January (14.8%) and lowest in July and August (12.2%).

Corporate bodies accounted for more than 80% of all employees. In this sector, employment was highest in the months immediately before, during and immediately after the tourist season, or between 1.26 and 1.27 million in the June-October period. Employment in this sector was lowest in the January-March period, between 1.21 and 1.23 million.

The manufacturing industry had the highest share in the number of all employed (19.8%), followed by commerce (17.1%), construction (8.6%), and public administration (8.5%).

The manufacturing industry employed nearly 249,000 people on average last year, commerce more than 222,000, construction around 108,200, while public administration employed 106,500 people.

CROBEX DOWN 0.5 PCT, UP ON WEEKLY LEVEL

Crobex ended the day at 1,588.66 points, but trading amounted to more than HRK 43.8 million, of which the largest part, amounting to HRK 42.11 million, was generated in regular trading.

The drop in the value of the index was mostly due to a 6.82 percent decline in the price of Hrvatski Telekom shares, which generated HRK 8.15 million in turnover.

HT shares can no longer be purchased together with the second part of the dividend, to be paid to shareholders on the day of a shareholders' meeting scheduled for April 21, on condition the meeting accepts the proposal to make the payment.

The second part of the dividend would in that case amount to HRK 17.15, while the price of HT shares on Thursday and Friday dropped by HRK 16.50 and now amounts to HRK 207.50.

Shares of the Atlantska Plovidba shipping company generated HRK 7.7 million in turnover, with their price going up 1.26 percent, while shares of the TOZ Penkala pencil factory went up by as much as 11.11 percent to HRK 444.44, generating HRK 6 million in turnover.

The most significant price change, a 30 percent increase, was recorded by shares of the Adriatic Oil Pipeline operator JANAF, which stated today that the Croatian Compulsory Oil Stocks Agency (HANDA) had shown an interest in recapitalising the company by purchasing a 26.6 percent interest in JANAF.

Trade in JANAF shares, which was today blocked for some time, amounted to slightly more than HRK 700,000.

(1 EUR = HRK 7.36)

DEPUTY PM POLANCEC TESTIFIES IN BIG MAESTRO CORRUPTION CASE

Giving testimony at the Zagreb County Court, Polancec dismissed claims by witness Ivan Komak, director and majority owner of the Osjecka Pivovara brewery, that he had warned Polancec at a meeting that one of the indictees in the trial, HFP vice-president Josip Matanovic, had sought bribes from him.

"I know that Komak litigated against the HFP and I met him on two or three occasions and remember that he complained about obstruction in the Fund and about having no one to negotiate with, but he did not mention any concrete names nor did he say that he was being asked to give bribes," said Polancec.

The conversion of the Nin Brickworks premises, the sale of the land plot Facinka in Porec, and the privatisation of the Osjecka Pivovara brewery are the three cases which, as the Office for the Suppression of Corruption and Organised Crime (USKOK) alleges, were marked by corruption and abuse of office which five of the eight indictees in the case are charged with.

At the time relevant to the indictment, Polancec was chairman of the HFP Management Fund.

"I learned about the Brickworks case only from the media, after the arrests were made. We never discussed it at sessions of the HFP Management Board, nor did I ever discuss it with any of the heads of HFP departments," said Polancec.

He said that it was at his proposal that the HFP Management Board decided to sell in a public tender the Facinka land plot to the town of Porec, despite the fact that the town had not offered the highest price.

He explained that the price was not the most important factor, but the purpose of the land, and that in that regard, the Porec town authorities had made the best offer.

Polancec went on to say that after the decision was made, the HFP received several letters claiming that the decision was illegal, but pointed out that he still considered it to be legal.

He added that the HFP discussed the decision again, declared the tender null and void, and recommended that the government give the land to the Porec town authorities free of charge, after the town authorities promised to build on it several infrastructure projects and a sports hall, and gave up government co-financing of the projects.

Polancec also described methods of work at the HFP, saying that the conference of HFP department heads, which also included the indicted former HFP vice-presidents Josip Matanovic and Robert Pesa, prepared for the HFP Management Board all relevant materials, analysed privatisation bids, and frequently gave recommendations on the best bids.

He said that the conference of department heads could independently invite bids for the sale of real estate in the amount of up to HRK 10 million.

Decisions on bids amounting to up to HRK 100 million were within the jurisdiction of the HFP Management Board, and decisions on bids exceeding HRK 100 million were made by the government's commission for the management of state-owned property, at the recommendation of the HFP Management Board, the Deputy PM said.

He added that he did not know how the conference of department heads had made decisions and that HFP Management Board members mostly did not attend sessions of the conference of department heads.

Speaking of the first indictee, Josip Matanovic, Polancec said that he was involved in all cases which required the opinion of the HFP's legal department, which was headed by Matanovic.

"His comments were extensive, I insisted on concrete proposals and conclusions, but it was not easy to draw a concrete conclusion from his comments," Polancec said.

At the end of today's hearing, Matanovic's defence attorney requested again that his client be released from custody, a motion that was opposed by the representative of the USKOK and turned down by the panel of judges conducting the trial, who said that the circumstances had not changed and that there still existed justified reasons for keeping the indictee in custody.

The trial will continue on Monday, April 20.

Eight people are standing trial in the Big Maestro case. They all pleaded not guilty at the beginning of the trial on 11 November 2008.

The eight defendants are former HFP vice-presidents Josip Matanovic and Robert Pesa, the head of the HFP's real estate department, Igor Petlevski, an official of that department, Darko Mrkonjic, a businessman and lecturer at the Faculty of Economics in Osijek, Mane Medic, lawyers Juraj Parazajder and Asja Piplovic, and Piplovic's associate Mladen Jandricek.

The USKOK charged them with graft, unauthorised disclosure of confidential business information, conspiracy to commit said crimes, and abuse of office.

In a separate trial within the Maestro investigation, former HFP vice-president Ivan Gotovac and entrepreneur Svjetlan Stanic were acquitted of corruption charges.

MINISTRY REFUTES REPORTS OF DEAL WITH ALBANIA ON NUCLEAR PLANT

Neither the ministry nor the government has ever given information on the signing of any nuclear power plant by the end of April 2009, the minister's advisor and ministry spokesman, Tomislav Mazal, said in a press release.

He said experts could confirm that this would be simply impossible and that negotiations on such contracts took years.

Mazal regretted that some Croatian and regional media persistently carried incorrect and incomplete information that Croatia and Albania would sign such an agreement by the end of this month.

Responding to an article about a new nuclear plant in Croatia in today's issue of the Croatian newspaper Vecernji List, which carried a statement by Mazal to Radio Deutsche Welle, Mazal said he never gave that statement.

"Also, we have never discussed nor published anywhere that such a nuclear power plant would be built on Lake Skadar (on the Montenegrin-Albanian border) and that it would cost EUR 4 billion. This is all media speculation that cannot be corroborated even by a single document," said the press release.

It recalled that Croatian Economy Minister Damir Polancec visited Albania late last month and that talks there also addressed possible cooperation in the construction of a nuclear power plant in Albania.

On that occasion, it was agreed that the two countries' economy ministries would sign a memorandum of understanding by the end of April, and that a joint task force would be set up to draw up a feasibility study for future decisions on the project, the press release said, adding that it was also stressed that both Croatia and Albania felt the project was of regional significance.

ZADAR HOSTING INT'L DEBATE ON CRIMINAL RESPONSIBILITY OF SEAFARERS

The event was organised by the Croatian Ministry of the Sea, Transport and Infrastructure, the Croatian Seafarers' Trade Union, the Mare Nostrum association, and the Croatian Maritime Law Society.

The debate drew maritime experts, jurists, professors, seafarers, and representatives of the International Maritime Organisation, the International Labour Organisation, and the International Transport Workers' Federation.

The head of the Croatian ministry's Maritime Transport Department, Mario Babic, said every day saw a new case of criminalisation of seafarers as well as pirate attacks on ships and seamen.

We support every country to protect their legal order, but when it comes to the punishment and prosecution of seafarers, we demand that the particularities of maritime affairs be taken into consideration, as without it command responsibility is inappropriate, said Babic.

We ask for the respect of seafarers' human rights, the right to defence and a speedy and effective settlement of cases, he added.

Also in attendance was Kristo Laptalo, the ship captain who spent 17 months in a Greek prison for cocaine smuggling, although he was innocent. "It is necessary to change the state of affairs in which innocent seafarers get into trouble," he said.

BEBIC: ZAVNOH BUILDING NEEDS TO BE REBUILT FROM FOUNDATION

Bebic said that antifascism was the foundation of Croatian statehood and of entire modern Europe. He added that documents for the reconstruction project would be prepared soon, after which it would be clear how much the project would cost, who would finance it and within which time frame it would be implemented.

The 65th anniversary of the ZAVNOH session will be commemorated on May 9.

Topusko is located about 100 kilometres south of Zagreb.

AP SAYS CROAT POSSIBLY INVOLVED IN ATTEMPTED ASSASSINATION OF MORALES

According to witnesses and police, police attempted to arrest the men in the center of Santa Cruz, an eastern Bolivian city and hub of anti-Morales sentiment, but they fled to a hotel where a shootout took place around 4 am, said AP.

Police said the alleged assassins detonated a grenade inside the hotel, blowing out its windows amid the gunfight. Three of the suspects, identified by state media as Hungarian, Irish and Bolivian, were killed, according to AP.

State prosecutor Jorge Gutierrez said yesterday a second Hungarian was arrested, along with a retired Bolivian soldier who fought in the 1990s wars in the former Yugoslavia.

A statement from Morales's office said that among the suspected killers was a man of Croatian and Irish nationality, who was with members of Bolivia's extreme right.

MESIC RECEIVES HEAD OF ISLAMIC COMMUNITY IN BOSNIA

President Mesic sees Bosnia-Herzegovina as more than a friend, he sees it in the only possible way, as a country which has its borders and is special because it is the most multiethnic and multicultural country after the break-up of the former Yugoslavia, Ceric told the press after the talks.

The test Bosnia-Herzegovina is undergoing is similar to what Europe is going through in the temptation with the European Union, and just as Europe needs help through transatlantic associations, so Bosnia needs friends to survive its multicultural and multiethnic framework, said Ceric.

He went on to say that Bosnia-Herzegovina, Croatia and the Bosniak community in Croatia should intensify Bosnian-Croatian relations in culture, politics and religion.

Ceric said he was happy that the Islamic community in Croatia was championing dialogue, coexistence and tolerance.

He said Mesic and he talked about the possibility of the Croatian parliament adopting the European Parliament's resolution which declared July 11 as Srebrenica Genocide Remembrance Day.

Commenting on a statement about the poor position of Catholics in Sarajevo by its archbishop, Cardinal Vinko Puljic, Ceric said he was sorry the cardinal felt that way, but added that Puljic never complained to him. "We in Bosnia can be an example of interreligious tolerance to many," he said, adding that Sarajevo was majority Bosniak because of the displaced persons who had not been allowed to return to their prewar homes yet.

In terms of post-war recovery, Bosnia has not recorded even one incident of revenge despite the genocide against Bosnian Muslims, which entitles us to claim that nobody can lecture us about morals, coexistence and tolerance, said Ceric.

Asked about speculation that he would run in Bosnia's presidential election, Ceric said he had no political ambitions.

Asked about some imams' assessment that writer Ivo Andric had been a Chetnik ideologist, Ceric said he would leave it up to experts to judge Andric's role in relation to Bosnia-Herzegovina.

Ceric was accompanied by the head of the Islamic community in Croatia, Mufti Sefko Omerbasic, and the chief mufti of Serbia's Islamic community, Muamer Zukorlic.

ISTRIA COUNTY PREFECT, VOJVODINA PARLIAMENT SPEAKER SATISFIED WITH COOPERATION

Jakovcic and Egeresi were speaking at a news conference held in Pula as part of the Days of Vojvodina in Istria event.

"There are still tensions in the area of the former Yugoslavia, but Istria County and Vojvodina have managed to show that cooperation is possible also in the new circumstances," said Jakovcic.

He added that the two regions set a model of cooperation both bilaterally and multilaterally, in a number of European forums, such as the Assembly of the European Regions.

Egeresi expressed satisfaction with the cooperation with Istria County, which he said could be used as a model for cooperation and friendship in relations between Croatia and Serbia.

The Days of Vojvodina in Istria event today included a meeting of business people from the two regions.

It was said at the meeting that companies from Istria last year alone exported to Serbia goods worth USD 33.7 million, mostly tobacco, canned sardines, paint and varnish. Most Serbian tourists in Croatia vacation in Istria, and last year there were around 17,000 arrivals from Serbia.

METROPOLITAN JOVAN, SANADER AND BEBIC EXTEND BEST WISHES FOR ORTHODOX EASTER

Croatian Prime Minister Ivo Sanader and Parliament Speaker Luka Bebic also offered their best wishes for the occasion.

"May you spend this greatest Christian holiday in peace and share its joy and blessing with your loved ones, filled with hope, love and optimism," Sanader said in his message to Metropolitan Jovan and all Orthodox believers.

BELGRADE AND PRISTINA SUBMIT POSITIONS ON KOSOVO'S INDEPENDENCE TO ICJ

According to a statement from the Serbian Foreign Ministry, Serbia's team of lawyers submitted two documents, one 350 pages long and the other 600 pages long, and a large number of maps.

The statement says that the motion contains all the necessary elements and legal arguments to prove that Kosovo's unilateral declaration of independence from Serbia was against international law.

Acting on a proposal from Serbia, the United Nations General Assembly has asked the ICJ, as the main judicial body of the world organisation, for an advisory opinion on the legality of Kosovo's declaration of independence.

The ICJ has invited all states in possession of relevant data on the issue to join in the case.

Kosovo also presented its position on the matter on Friday. A 200-page document and a 300-page supplement were submitted to the ICJ by the head of Kosovo's legal team, British international law expert Michael Wood.

Kosovo Foreign Minister Skender Hyseni declined to discuss the contents of the documents submitted to the ICJ, but stressed he was confident that the arguments presented therein were in Kosovo's favour.

Kosovo declared independence from Serbia on February 17, 2008 and has been recognised as an independent state by 57 countries so far.

SERBIAN PRESIDENT VISITS KOSOVO, CALLS FOR PEACE

Tadic arrived in Kosovo aboard a Kosovo Force (KFOR) helicopter to visit the Serb Orthodox monastery of Visoki Decani in western Kosovo on the occasion of Good Friday.

The visit took place amidst tight security. KFOR troops were deployed around the monastery and only KFOR vehicles and vehicles belonging to the EU rule of law mission in Kosovo (EULEX) were allowed to enter the monastery grounds.

After arriving at the monastery, Tadic sent out a message on the occasion of Good Friday, addressing it to both Serbs and Albanians, and referring to Kosovo as a part of Serbia.

"Today I have a message of peace for the Serbs, Albanians and all people who live in Kosovo in our Serbia," Tadic said.

In a letter to the EU Special Representative to Kosovo, Pieter Feith, Kosovo Prime Minister Hashim Thaci said that he decided to allow Tadic to visit Decani because his visit was private and for religious reasons, despite the fact that Tadic failed to ask the Kosovo authorities for permission to enter the country.

Feith said previously that Kosovo authorities have jurisdiction over decisions regarding visits by the Serbian president and recommended that the Kosovo government grant the visit.

Tadic was taken to Decani by helicopter for security reasons, even though he had informed international representatives in Kosovo that he would arrive by car.

Kosovo Interior Minister Zenun Pajaziti warned on Thursday that he would not let Tadic visit Kosovo if the Serbian president failed to follow the procedure prescribed by law.

Relevant Kosovo institutions did not receive by Thursday any request from the Serbian president to visit Kosovo and the Kosovo police will not let anyone enter Kosovo without the necessary permit, said Pajaziti.

Tadic's office, however, applied to the European Union office for a permit to visit Kosovo. The Kosovo authorities said they had jurisdiction over such decisions, but that they had not been contacted.

The authorities in Belgrade have said that they will continue to seek permission to visit Kosovo exclusively from representatives of the international community in Kosovo.

A number of Serbian state officials have been denied entry into Kosovo lately because they sought permission from international officials and not from the Kosovo authorities.

IN OTHER NEWS:

President Stjepan Mesic and Prime Minister Ivo Sanader met at government headquarters in Zagreb on Friday as part of regular weekly consultations, the government said in a press release. Mesic and Sanader co-signed a decision to relieve of duty Ladislav Pivcevic, chief-of-staff of the National Security Council, at his request, replacing him with Petar Misevic.

Zagreb Mayor Milan Bandic on Friday opened in the city's Cvjetni Trg square an event marking Planet Earth Day and Cleanliness Day. The mayor said that the city authorities would continue to look after communal waste and that a project for the reorganisation of the city's Jakusevac rubbish dump and a project for a city waste water purification plant were completed. "Let's save energy and protect the environment," Bandic said in his brief address in which he also recalled that Zagreb was one of the tidiest European cities. Planet Earth Day is marked on April 22. The Earth Day campaign in Zagreb was organised by the Zagreb Holding, a consortium comprising utilities owned by the City of Zagreb and its Cistoca sanitation company. The event is being held under the auspices of the Environmental Protection Ministry and the Zagreb city authorities.

Croatia's National Tourist Board (HTZ) said on Friday it was continuing the promotion of tourism in Hungary, the Czech Republic and Poland by including the Lado ensemble, which performs traditional Croatian dance and music. HTZ said its aim was to create a synergy of tourism and cultural heritage in order to attract tourists from specific markets. The HTZ-organised Lado tour is due to begin in Budapest tonight. The next stops are Prague on April 21 and Poland, with performances in Wroclaw on April 22, Boleslawiec on April 23, and Krakow on April 24.

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