Peru Cabinet Narrowly Wins Confidence Vote, Averting Crisis
(Bloomberg) -- Peru’s cabinet won a vote of confidence in the opposition-led congress, providing a respite for the embattled government of President Pedro Castillo after clashes with congress.
Lawmakers voted 68 to 56 on Thursday in favor of the cabinet led by Prime Minister Mirtha Vasquez, ending weeks of uncertainty for Castillo and averting a possible constitutional crisis. There was one abstention.
“The confidence vote passing avoids a new political shock, so it is thus a positive short-run development,” Citigroup strategists led by Dirk Willer wrote in a note Friday.
The nation’s benchmark stock was little changed Friday, while dollar bonds edged higher. The Peruvian sol was unchanged during early trading Friday at 4.0140 per dollar.
Castillo named Vasquez last month to replace radical prime minister Guido Bellido, who’d threatened to nationalize a major gas field. The move was intended to ease tensions with congress and improve “governability”.
Read More: Peru President’s Party Breaks With Government on Cabinet
Vasquez’s appointment was unpopular with many of Castillo’s own supporters. The radical socialist party behind Castillo’s rapid rise from school teacher president split during the vote, with some backing the government, and others voting against, including Bellido.
Vasquez, 46, has worked as a human rights lawyer and environmental activist and has been a critic of large mining companies. She was head of congress in the period 2020-2021.
In a speech after the vote, Vasquez said her “leftist” government remains committed to transforming Peru.
The result gives Castillo some breathing room, though this may not last long, said Fernando Tuesta, a Lima-based political scientist, speaking in an interview.
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