(Bloomberg) -- Peru’s President Pedro Castillo on Friday named a close ally already censured by congress as his new prime minister in an apparent escalation of the government’s fight with the legislature.
Castillo swore in Betssy Chavez, who was Labor Minister until congress forced her resignation in May, as his fifth prime minister since taking power in July 2021 and after Anibal Torres quit the position Thursday night. The fact that the president picked an ally with rocky relationships with the opposition-held congress threatens to deepen a political crisis that already saw two failed attempts to impeach Castillo.
“Without a doubt, this is a provocation,” said Carlos Melendez, a political scientist at the Lima-based 50+1 Grupo de Analisis Politico consulting firm. “The government is putting itself on a track to close the congress.”
Read More: Peru’s Turmoil Deepens as Yet Another Prime Minister Leaves
Should congress refuse to confirm Chavez, Castillo may be tempted to use a constitutional provision to dissolve congress. Torres and the rest of the cabinet resigned following the rejection by the unicameral legislature of a motion of confidence and two consecutive no confidence votes allow the president to pursue that option.
Low approval ratings, however, make that strategy risky as it would end up triggering fresh elections. Castillo instead may be aiming “to keep the sword of Damocles hanging over congress for the sake of his own survival,” Guillermo Arbe, head economist at the Peruvian unit of Bank of Nova Scotia said in a note.
Back in May, the legislature impeached Chavez for allowing air-traffic controllers to strike over the Easter holiday. She also faces a criminal investigation for allegedly favoring friends and family with public-sector jobs.
To complicate things further, Congress President Jose Williams rejected the interpretation that the legislature’s decision on Thursday meant an overall censure of the government and warned the president against attempting to shut the chamber.
“To do so would lead to an unconstitutional dissolution of the congress,” he said Friday morning before the appointment of Chavez.
The Peruvian sol declined 0.2% at 3.86 per dollar on Friday while the nation’s dollar bonds maturing in 2031 advanced slightly.
©2022 Bloomberg L.P.
BNN Bloomberg Picks
Looking to travel this spring? Here are some cost-saving tips
Opportunities in gold stocks: Three hot picks from John Ing
Impersonators posing as homeowners linked to 32 fraud cases in Ontario and B.C.
Tips for finding cheaper protein in the meat aisle and beyond
What the Bank of Canada's latest rate hike means for mortgage holders
Experts explain how to cope with money stress