Canada

["Ian Murray" <seamus2001@xxxxxxxxx>]

Canadain Pm Fires Finance Minister
Monday June 3, 2002 1:00 AM


TORONTO (AP) - A power struggle in Canada's governing Liberal Party
brought the second Cabinet shuffle in a week Sunday, with Prime Minister
Jean Chretien ousting the man considered the front-runner to succeed
him.

Paul Martin's tight fiscal policies eliminated huge budget deficits
during the almost nine years he spent as finance minister since 1993. He
was also a leading voice in setting up a form of international
bankruptcy court to handle cases of nations defaulting on loan
repayments and other problems.

Martin's departure comes less than two weeks before he was to host the
Group of Seven finance ministers in a prelude to the G-8 summit in
Alberta.

Deputy Prime Minister John Manley was named the new finance minister,
and said Sunday ``there's no change in economy policy that will come
from this appointment.''

The shift follows Chretien's announcement Friday that he intends to
serve out his third term as prime minister, dashing Martin's hopes of an
easy midterm transition to succeed Chretien.

Martin has a solid support base within the party and also is popular
among conservatives and the business community for his fiscal policies,
but whether he can mount a strong leadership campaign outside the
Cabinet was uncertain.

Chretien has acted quickly to answer allegations of cronyism and a
disruptive leadership struggle in his party, dismissing Defense Minister
Art Eggleton on May 26 for giving a government contract to a former
girlfriend.

In a letter announcing Martin's departure from the Cabinet, Chretien
praised Martin for outstanding service to the country but said
nongovernment issues made it impossible for them to work together.

At a news conference, Chretien denied that Martin was fired, but his
letter made clear there was no alternative to Martin leaving the
Cabinet.

``We both understand with real regret that this is in the best interests
of the government and the country and that you step down from the
Cabinet,'' it said.

There was no immediate comment from Martin, who was expected to hold a
news conference later Sunday or Monday.

Chretien, the longest-serving leader among Western powers, led the
Liberals to a third-straight Parliament majority in the 2000 election.
With another election required by 2005 and a Liberal Party convention
planned for next year, there was speculation that the 68-year-old
Chretien would step down in 2003 to smooth the way for his succession.

An overt campaign by Martin's supporters to position Martin as
Chretien's successor angered the prime minister, and his announcement
last week that he will complete his term was a direct rebuke of
leadership aspirations of Martin and others.

He has blamed the undeclared battle to succeed him for recent leaks that
contributed to allegations of influence-peddling and cronyism by members
of his Cabinet. In addition to firing Eggleton, Chretien also reassigned
Public Works Minister Don Boudria over questions about lodging at the
property of a Liberal Party supporter who receives government business.

Martin is the son of a former Liberal member of Parliament who served in
the Cabinet of four prime ministers and is considered a major figure in
forming Canada's social welfare system.

The younger Martin was first elected to Parliament in 1988 and lost to
Chretien in a party leadership vote in 1990.