Swedish foreign minister Carl Bildt, an expert on the Balkans, said on behalf of the EU Presidency that Sanader’s resignation was "a loss," adding that the Croatian politician was an important figure in EU integration.
A champion of Croatia's European Union entry drive, Sanader suffered a blow last month when the bloc's executive called off accession talks for the third time this year after a failure to resolve a border row with EU member Slovenia.
He said he would not run for president of the republic later this year, and dismissed speculation that he was quitting because of bad health. "Thank God, I'm not ill," he said.
Sanader proposed his deputy, Jadranka Kosor, to take over the government. He did not give a reason for his resignation.
His government had been beset by economic woes, including a rapidly slowing economy, plunging budget revenues, and speculation by some analysts that Zagreb may have to turn to the IMF for a bailout.
Asked by reporters whether his decision could be linked to delays in Croatia's EU accession negotiations, Sanader admitted he could not say there was no connection. "I certainly had that on my mind when thinking about the resignation. Certainly, the EU and the project of the European integration, which I have repeatedly stated over recent months, stand no chance if the principle of blackmailing is accepted as a principle for negotiating," Sanader said.
Saying he did not rule out a return to politics, the outgoing Premier however refuted allegations he was withdrawing because Croatia was in a difficult economic situation. In this context, he stressed that he never shunned responsibility and added that he always perceived engagement in politics as serving Croatian citizens.
After Sanader decided to quit politics, Croatia's president Stjepan Mesic said that he would consult leaders of parliamentary parties before giving the mandate for the new government to Jadranka Kosor.
"I'm suprised by Sanader's timing, as Croatia is experiencing a difficult economic situation and EU entry negotiations are blocked by Slovenia. In such circumstances, a government crisis will not help in stabilising the country," Mesic added.
(EurActiv with Reuters and HINA.)
