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Peru's PM resigns after spat with first lady, finance minister

LIMA (Reuters) - Peruvian Prime Minister Cesar Villanueva said on Monday that he was stepping down after just four months in office and a recent public spat with the finance minister and the first lady over his effort to raise the minimum wage.

Peru's Prime Minister Cesar Villanueva attends a session at the annual meeting of the World Economic Forum (WEF) in Davos January 23, 2014. REUTERS/Denis Balibouse

The government did not immediately announce any other cabinet changes.

Villanueva said on local broadcaster RPP that President Ollanta Humala had accepted his resignation on Monday after he told a local newspaper that he was working on a new wage law with the finance ministry.

First Lady Nadine Heredia and later Finance Minister Luis Miguel Castilla, one of Humala’s few original cabinet members who have remained in power, denied that the government was working on raising the minimum wage.

Castilla’s rebuttal late on Sunday was widely interpreted as a way to embarrass Villanueva and to push him from power.

Humala has not yet commented on the dispute.

Villanueva is the fourth cabinet chief to resign from the government of Humala, who started the second half of his five-year term in January with a 26 percent approval rating.

Humala’s popularity rose to 33 percent in February after an international court’s ruling on a maritime border dispute with Chile that gave Peru control of new waters.

Villanueva’s departure does not necessarily mean a broader cabinet reshuffling. In Peru, presidents rather than prime ministers form cabinets.

Villanueva was the twice-elected president of a northern Amazonian region and was affiliated with center-left parties.

Humala, a former left-leaning nationalist radical, raised the minimum wage twice, to 750 soles ($267 per month), after being elected on promises to make sure more Peruvians benefit from the fast-growing country’s mineral exports.

Additional reporting by Mitra Taj; Editing by James Dalgleish and Lisa Von Ahn