July 2, 2014 / 1:20 PM / 3 years ago

UPDATE 3-Slovak economy minister resigns in cabinet shake-up

* Prime minister aims to boost sagging popularity

* Malatinsky to keep working with state energy companies

* Government looks to spend more after reducing deficit (Adds confirmation of the name of new minister in para 5)

PRAGUE, July 2 (Reuters) - Slovakia's Economy Minister Tomas Malatinsky resigned on Wednesday in the first move of a cabinet shake-up as Prime Minister Robert Fico tried to prop up his centre-left government's sagging popularity.

Fico said over the weekend the first changes to his cabinet since taking power in 2012 would happen soon. He also laid out plans for a 250 million-euro package to help poorer Slovaks after fiscal tightening in previous years.

"I am comfortable (with leaving). I discussed the situation with the prime minister and this solution is favourable for me," the politically unaffiliated Malatinsky said.

The move was seen as part of a bid to boost Fico's public support after he was trounced by independent Andrej Kiska in a presidential election in March.

Fico said in televised news conference that Deputy Minister Pavol Pavlis, a trained engineer, would succeed Malatinsky at the ministry, which manages state property.

Pavlic, 53, is a member of Fico's Smer party which has a majority in parliament and nominates all members of the cabinet.

Education Minister Dusan Caplovic also resigned on Wednesday.

Malatinsky, who has overseen the state's stakes in companies like Slovak Telekom and utility Slovenske Elektrarne, told reporters he would still work with the national property fund on creating a holding for state energy companies.

"This position will probably be better for preparing it and finishing it when I am outside the government," he said.

The state has a minority 49 percent stake in Slovak Telekom and said in February it would look at floating its shares because Deutsche Telekom had so far passed on taking full control.

Slovakia also holds a 34 percent stake in Slovenske Elektrarne. Italy's Enel holds the remaining shares but is looking at mandating banks for a sale.

UKRAINE

Malatinsky headed the Slovak side in talks with the EU and Ukraine this year that led to an agreement on opening up limited capacity for the "reverse flow" of natural gas from central Europe to Ukraine, which has clashed with its supplier Russia.

The popularity of Fico's Smer party has dropped to 32 percent from 38 percent early this year, according to Focus agency, but is still twice that of its closest competitor.

After cutting the budget deficit below an EU-mandated ceiling of 3 percent of economic output, the government is looking to spend more.

Fico has detailed plans to raise pensions and the minimum wage, cut household gas bills, and subsidise train tickets for students, pensioners and commuters. (Reporting by Jason Hovet; editing by Tom Heneghan)

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