Spain sacks economy chief as government struggles

 Spain's Prime Minister Jose Luis Rodriguez Zapatero on Tuesday reshuffled his cabinet and dumped veteran economy minister Pedro Solbes in a bid to revive a government struggling with a deep recession.

Solbes, a former European commissioner for economic and monetary affairs, will be replaced by Elena Salgado, currently public service minister and an experienced manager, but a little known quantity for financial markets.

"We have to combat the crisis and also to prepare the basis for the future," Zapatero told a news conference, in which he praised Salgado's talents as an administrator and said that she would be given the task of implementing existing policies as well as possible.

Just a year after winning a second four-year term, Zapatero's Socialists fell behind the conservative Popular Party in an opinion poll on Sunday. Despite 70 billion euros ($94.7 billion) in government spending plans to keep the economy ticking over, unemployment has almost doubled from pre-crisis levels to 15.5 percent – the highest rate in the European Union.

Zapatero also said he was replacing Public Services Minister Magdalena Alvarez with experienced Socialist Party official Jose Blanco. In addition, he appointed Andalusian politician Manuel Chaves to his cabinet, which has sometimes seemed to lack political direction as it copes with the crisis.

Solbes, 66, had frequently expressed a wish to retire and had also publicly contradicted Zapatero when the prime minister said he could further boost public spending in order to revive the economy.

Economic difficulties were blamed for the Socialists' defeat in regional elections in Galicia on March 1. The economy aside, the government has also had to overcome the resignation of the justice minister following an ill-advised hunting trip and an uproar over the withdrawal of Spanish troops from Kosovo.