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Spain’s economy minister replaced in cabinet reshuffle

Published on 07/04/2009

MADRID – Prime Minister Jose Luis Rodriguez Zapatero replaced his economy minister Tuesday in a reshuffle seen as a bid to boost his government's flagging support in Spain's worst recession in a generation.

Economy Minister Pedro Solbes, a European commissioner between 1999 and 2004, was replaced by Elena Salgado, the minister for public administration, in the long-awaited reshuffle and will leave the government.

The health, education and transport and infrastructure portfolios also changed hands but the prime minister kept several key posts unchanged, including the ministers of defence, foreign affairs and interior.

Zapatero told a news conference the reshuffle was necessary for a "change of rhythm" to tackle the economic crisis "with a new and stronger drive".

"We have to combat the crisis and also to prepare the basis for the future," he said, adding that Salgado is "the appropriate person" for this task "and will demonstrate her extraordinary management ability."

He also praised Solbes for his "toughness, dedication and intelligence".

Solbes, 66, who served as finance minister in the 1990s in a previous Socialist government and has held the economy portfolio since Zapatero came to power in March 2004, had indicated that he wanted to retire.

His insistence on the need to enforce budgetary restraint has put him increasingly at odds with Zapatero, who backs additional government spending as a means to promote confidence and create jobs.

Party spokesman Jose Blanco will take on the post of transport and infrastructure minister, replacing Magdalena Alvarez who has been attacked over her handling of a snowstorm in January that brought Madrid to a standstill.

Secretary of State for Ibero-America Trinidad Jimenez becomes health minister, replacing Bernat Soria, while the rector of the Autonomous University of Madrid, Angel Gabilondo, replaces Mercedes Cabrera Calvo-Sotelo as education minister.

The prime minister also created a new ministry for regional cooperation that will oversee the central government’s relations with Spain’s regional governments. The new position will be filled in by the president of the southwestern region of Andalucia, Manuel Chaves.

King Juan Carlos will swear in the new cabinet later on Tuesday.

The cabinet reshuffle comes after a poll published Sunday in left-wing daily Publico ahead of June elections for the European Parliament that showed the worsening economic situation is taking its toll on the popularity of the government, even among members of Socialist Party.

The party, re-elected to a second term with a slightly bigger majority in parliament in a March 2008 general election, trails the main opposition Popular Party (PP) by 1.5 percentage points, according to the poll published in March.

The survey put the PP at 40.7 percent support, up five percentage points since January and the party’s best score since the general election, compared to 39.2 percent for the Socialists, down one percentage point during the period.

Spain entered into its first recession in 15 years at the end of 2008 as the global financial crisis worsened a correction that was already underway in the real estate sector, a key driver of growth.

The country’s unemployment rate hit 15.5 percent in February, the highest level in the 27-nation European Union, and the Bank of Spain predicted Friday that it will reach 19.4 percent next year as the recession deepens.

Last year Zapatero unveiled an EUR-11-billion stimulus package, mostly dedicated to public works, aimed at fighting unemployment.

Spain’s public deficit hit 3.8 percent of GDP in 2008, compared to a surplus of 2.2 percent in the previous year.

Under EU rules, the bloc’s member countries are supposed to keep their public deficit shortfalls to less than three percent of GDP.

AFP / Expatica