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Turmoil in Peru as Prime Minister quits

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  • Greg Cannon
    http://edition.cnn.com/2005/WORLD/americas/08/11/peru.toledo.reut/ Turmoil in Peru as PM quits Friday, August 12, 2005 Posted: 0001 GMT (0801 HKT) LIMA, Peru
    Message 1 of 1 , Aug 11, 2005
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      http://edition.cnn.com/2005/WORLD/americas/08/11/peru.toledo.reut/

      Turmoil in Peru as PM quits

      Friday, August 12, 2005 Posted: 0001 GMT (0801 HKT)

      LIMA, Peru (Reuters) -- Peruvian President Alejandro
      Toledo said Thursday he had asked all his ministers to
      tender their resignations and would evaluate who would
      stay on in their jobs.

      The government was plunged into crisis earlier when
      Prime Minister Carlos Ferrero quit, following the
      appointment of Toledo's controversial top ally,
      Fernando Olivera, as foreign minister.

      Housing and Construction Minister Carlos Bruce also
      resigned immediately.

      Bruce and Ferrero both publicly split with Olivera
      over legalizing some cultivation of the raw material
      for cocaine, and their resignations signal more
      turbulence ahead for the unpopular Toledo in his final
      months in office.

      Under Peru's constitution, once a prime minister
      resigns all ministers must tender their resignations.

      "Carlos Ferrero has tendered his irrevocable
      resignation as prime minister," a statement from his
      office said.

      Ferrero, a veteran lawmaker who has been prime
      minister since December 2003, would have had to quit
      the Cabinet by early October if he wanted to run for a
      congressional seat, but the timing of his announcement
      -- minutes after Toledo's closest ally was sworn in as
      foreign minister -- was a surprise.

      There was no immediate word on who would replace him.

      Toledo has lurched from crisis to crisis throughout
      his four years in office.

      His approval rating -- which has crept up to 14
      percent -- could take another hit over the Olivera
      appointment, judging by a flurry of indignant calls to
      radio shows.

      Toledo is barred by law from running in elections in
      April 2006 and will leave office in July. But he needs
      to keep a firm grip on the country until then with
      signs public spending is rising too fast and more job
      and pay protests are brewing.

      Both Bruce, Toledo's longest-serving and most popular
      minister, and Ferrero had opposed Olivera's vocal
      support for a regional law declaring some coca crops
      legal in parts of southern Peru. Critics feared that
      could spark a rise in cocaine production in the
      world's No. 2 producer.

      Olivera, 47, is leader of the junior coalition party
      whose support is crucial in a Congress where Toledo
      lacks a majority. He was justice minister in Toledo's
      first Cabinet in 2001 and was ambassador to Spain
      until his appointment.

      Olivera's appointment triggered an avalanche of
      criticism, including from members of Toledo's own Peru
      Posible party.

      "It couldn't be worse," ran the banner headline in La
      Republica.

      Analysts did not expect Olivera's entrance or
      Ferrero's exit to spook investors immediately and
      Peruvian bonds took the news in their stride, with
      prices little changed.

      But his support for a highway linking Peru and Brazil,
      despite criticism of its high cost, could worry
      investors after the government admitted it had already
      overshot this year's spending target.

      Olivera won notoriety in 2000 when he presented to the
      media the video of former spy chief Vladimiro
      Montesinos paying off a congressman -- explosive
      evidence of corruption at the heart of ex-President
      Alberto Fujimori's government. The video triggered an
      unprecedented scandal that felled Fujimori.

      But his abrasive manner has made him plenty of
      enemies.

      He publicly refused to shake hands last week with
      Bruce -- ironically on a day honoring diplomats.

      He once slammed a car door on a journalist's hand when
      she was trying to interview him and told another
      bluntly to "shut up." He also called the government's
      drugs chief inefficient and urged him to quit.

      "I don't know how someone who behaves like that can be
      foreign minister," said Toledo party lawmaker Doris Sanchez.
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