APPOINTMENT OF FERNANDO OLIVERA AS FOREIGN

UNCLAS LIMA 003476

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PINR PE
SUBJECT: APPOINTMENT OF FERNANDO OLIVERA AS FOREIGN
MINISTER SPARKS CABINET CRISIS

REF: LIMA 3416


1. (U) SUMMARY: President Alejandro Toledo appointed
coalition ally Fernando Olivera as Foreign Minister on 8/11;
Prime Minister Carlos Ferrero and Housing Minister Carlos
Bruce resigned in response. Health Minister Pilar Mazzetti
and Justice Minister Eduardo Salhuana reportedly boycotted
Olivera's swearing-in ceremony and may follow suit. Toledo
has refused to accept Ferrero's "irrevocable" resignation,
and is trying to forge a rapprochement within the Cabinet and
rally his Peru Posible party in support. The Cabinet crisis
raises governability questions (a new Prime Minister requires
congressional ratification within 30 days),creates tenstions
within the governing coalition and is certain to re-energize
the opposition parties. END SUMMARY.


2. (U) Fernando Olivera, leader of the Independent
Moralizing Front (FIM) Party, was sworn in by Toledo as
Minister of Foreign Relations on 8/11. Prime Minister
Ferrero and Housing Minister Bruce submitted their
"irrevocable" resignations in response. The President
reportedly has refused to accept Ferrero's resignation; it is
unclear whether he has accepted Bruce's. Ferrero, Bruce, and
Health Minister Mazzetti did not/not attend Olivera's
swearing-in ceremony, and there are conflicting reports that
Justice Minister Salhuana also boycotted the event.


3. (U) Toledo reportedly visited the Prime Minister's
Office to lobby Ferrero personally to stay on, without
success. On the afternoon of 8/11, the President called on
legislators of his Peru Posible party to a meeting at the
Presidency to address the crisis.


4. (U) COMMENT: Toledo's intention to name Olivera Foreign
Minister has been public knowledge for weeks, sparking nearly
unanimous negative reactions from the media, opposition
parties, and even within his Peru Posible party. Olivera's
decision to defend Cuzco Regional President Carlos Cuaresma's
coca ordinance, which sought to under cut the GOP's
antinarcotics policy, led to open confrontation with Ferrero
and Bruce and raised further doubts about the FIM leader's
suitability for a ministerial post (Reftel). The President's
decision to go ahead with Olivera's appointment nonetheless
has now resulted in a Cabinet crisis that creates
governability questions (a new Prime Minister will need to
obtain congressional approval within 30 days of nomination or
the Cabinet is dissolved),heightens political tensions
between Peru Posible and its FIM coalition ally, and is
certain to re-energize opposition attacks on the GOP. The
next few days should determine whether Toledo can somehow
fashion a rapprochement within the Cabinet and maintain the
governing coalition. Embassy will continue to follow events
cloesely. END COMMENT.
STRUBLE