Croatian Graft Trial Stumbles As Witness Baulks

Croatia`s inefficient judiciary is one of the main obstacles to the success of EU membership.

EU-aspirant Croatia's anti- corruption drive suffered a blow on Monday when a key witness declined to testify against a former general accused of stealing $5 million worth of diamonds.

Ex-general Vladimir Zagorec denies charges he failed to return diamonds received from an arms dealer as guarantee for delivery of anti-aircraft rockets during Croatia's 1991-95 war of independence from Serb-dominated federal Yugoslavia.

Witness Hrvoje Petrac had made the accusation at his own trial two years ago, when he was jailed for 6 years for kidnapping Zagorec's son. On Monday, Petrac was moved under police guard from a provincial prison to Zagreb where Zagorec has been on trial since extradition from Austria in October.

The state news agency Hina said Petrac had told the Zagreb county court he was "deeply anguished and unable to testify".

One of the key witnesses for the prosecution, he said he was too shaken by the killing of his friend, newspaper editor Ivo Pukanic, in a car bomb in October.

Only two weeks before that, the daughter of Zagorec's lawyer, Zvonimir Hodak, was shot in the head and killed. Police are still looking for her killer. Hodak had suspected Petrac of being behind the murder. Petrac denied the accusation.

The trials of both men are at the heart of Croatia's efforts to crack down on crime and corruption, as required by the European Union, which Zagreb hopes to join in 2011. Croatia's inefficient judiciary is one of the main obstacles to the success of its membership bid.

Authorities say Zagorec did not record the diamonds in the ministry's books and took them with him when he left his post as a deputy defence minister in 2000. Zagorec denies all charges.

Zagorec, now a wealthy businessman, says he was forced to move to Austria because his life was in jeopardy in Croatia. He moved to Austria permanently after his son was kidnapped in Zagreb in 2004. He paid a large ransom for his safe return.

Hodak and the state prosecutor said on Monday they still wanted to question Petrac. The court has to decide if Petrac will be questioned at a later date or the court will use minutes from his previous interrogation, Hina said.