Panama officials quit after foreign minister fired

Reuters News
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Posted: Aug 31, 2011 9:34 PM
Panama officials quit after foreign minister fired

By Sean Mattson

PANAMA CITY (Reuters) - A number of senior Panamanian government officials quit their posts on Wednesday to protest President Ricardo Martinelli's decision to fire former political ally Juan Carlos Varela as foreign minister.

The resignations were led by Finance Minister Alberto Vallarino, who said on Tuesday he and other top officials from Varela's party would quit over his ouster.

Vallarino said in a statement he would stay in office until his replacement was named. Analysts said the Finance Ministry changes were unlikely to harm Panama's economic outlook or fiscal policy.

Martinelli sacked Varela after accusing him of dedicating too much time to his ambition to run for president in 2014. The rupture between the two effectively ended the political alliance that put Martinelli in power in 2009. Varela remains in the largely ceremonial post of vice president.

Deputy ministers from the Interior, Labor and Finance Ministries were among the officials who resigned, some of them replaced with Martinelli loyalists in the president's biggest Cabinet reshuffle so far.

The departures do not mean the end of Martinelli's government because the president does not need the support of Varela's Panamenista Party, or PP, to get legislation passed.

Heather Berkman, an analyst at Eurasia Group, said Varela's departure from the Cabinet increased the risk that Martinelli would become more brash in his decision-making.

"Varela was sort of a moderating influence and someone that international investors and companies felt comfortable operating with," she said.

The president won a landslide victory in 2009 with the backing of Varela, who withdrew his candidacy in exchange for Martinelli's support in 2014. That deal has fallen through.

Martinelli's office swore in new senior officials, including Roberto Henriquez, who formerly held the trade portfolio, as foreign minister.

(Editing by Peter Cooney)