Greek Merchant Marine Min. Resigns Over Scandal

Voulgarakis had come under scrutiny over real estate transactions involving companies he co-owned with his wife.

Greece's merchant marine minister resigned on Friday over allegations of wrongdoing that were harming the ruling conservatives' popularity.

George Voulgarakis, 49, was the second minister to quit over scandals that have shaken the government since it returned to power in September 2007. He has denied any wrongdoing.

Prime Minister Costas Karamanlis has accepted his resignation and he will be replaced by Anastasios Papaligouras, 60, a former justice minister, an official statement said.

Greece has one of the world's largest merchant marine fleets and shipping is the second biggest contributor to its economy after tourism.

Voulgarakis had come under scrutiny over real estate transactions involving companies he co-owned with his wife and off-shore companies they used to avoid high taxes.

"Lies and mud are used for my political assassination," read Voulgarakis' resignation letter, released by the government. "I can take the attack...but I cannot allow this attack to hurt the party, the government's work and you personally."

Karamanlis, under fire over a series of scandals, on Sunday supported Voulgarakis and said he had done nothing illegal.

But ruling party members had demanded his dismissal, insisting any hint of impropriety was hurting the party, which has seen ratings drop to about 25 percent, the lowest in years.

Karamanlis swept to power in 2004 pledging to clean up politics after decades of socialist graft. But his government has also been hit by scandals and he was narrowly re-elected last year, winning only 152 seats in the 300-seat parliament.

A slowing economy has also increased public discontent and new taxes imposed to plug budget holes have angered opposition parties, unions and even some within conservative party ranks.

Voulgarakis, who had overseen privatisations at Greece's main commercial ports, was criticised for family real-estate transactions that may have been legal but aimed at avoiding paying levies at a time when new taxes were imposed.

The media has said Karamanlis's thin majority prevented him from expelling ministers accused of wrongdoing despite the damage being done to the government.

"It is clear that for some time now Mr. Karamanlis is held hostage of the 152 seat majority in parliament," liberal daily Ta Nea said in an editorial. "How long can a government last if it can take no initiative."