Peru's Kuczynski forms Cabinet, aims to placate Congress: sources

Reuters News
Posted: Sep 17, 2017 12:22 PM

By Mitra Taj and Marco Aquino

BUENOS AIRES/LIMA (Reuters) - Peruvian center-right President Pedro Pablo Kuczynski plans to make Vice President Mercedes Araoz his new prime minister and replace five other ministers in a Cabinet shuffle aimed at placating the opposition-ruled Congress, three government sources said on Sunday.

Kuczynski has decided to name Deputy Economy Minister Claudia Cooper as his new finance minister and to replace his justice, education, health and housing ministers, said the sources, who spoke on the condition of anonymity because an announcement had not been made.

Congress, which is controlled by the populist right-wing opposition party Popular Force, dismissed Kuczynski's Cabinet in a 77-22 vote of no-confidence on Friday. That deepened a political standoff that could lead to new legislative elections if lawmakers reject the incoming Cabinet.

Kuczynski, a 78-year-old former Wall Street banker who took office a year ago, cannot reappoint his outgoing prime minister, Fernando Zavala, but can do so for other ministers. Opposition lawmakers, however, have called for new faces.

Kuczynski had been considering appointing his other vice president, Martin Vizcarra, as his new prime minister but opted for Araoz following a meeting with lawmakers in his party who argued she would be better able to ease hostilities with the opposition, two of the sources said.

Araoz was finance minister in the 2006-2011 right-wing government of President Alan Garcia and has faced less criticism than Vizcarra from Popular Force, which often works with Garcia's party.

Popular Force has an absolute majority in Congress and is led by Kuczynski's defeated electoral rival Keiko Fujimori.

Some of Kuczynski's supporters had called for a cabinet that Congress would surely reject since another vote of no-confidence would allow the president to dissolve Congress. But with his popularity hitting new lows in recent opinion polls, new legislative elections might also weaken Kuczynski's hand further.

His approval rating dropped 7 points to 22 percent in Ipsos' monthly poll, which was taken September 13-15 and published on Sunday in local daily newspaper El Comercio.

(Reporting By Mitra Taj in Buenos Aires and Marco Aquino in Lima; Editing by Lisa Von Ahn)