Tunisia's New Cabinet Deepens Rift Between President and PM

(Bloomberg) -- Tunisian President Beji Caid Essebsi has rejected a cabinet reshuffle announced by the prime minister, escalating a political deadlock between the former allies as the government struggles to revive an economy saddled with high inflation and a financial crisis.

Prime Minister Youssef Chahed announced the appointments in a speech on state television late Monday, in an effort to shore up support amid calls from within his own party to step down. The changes included the transport and justice ministers, as well as naming a Jewish businessman as tourism minister -- a rarity in Arab countries. The key finance and interior ministry portfolios, however, were untouched.

The changes help strengthen Chahed's own position in government but deepen his rift with the president and divisions within the Nidaa Tounes party to which both politicians belong. Essebsi "does not agree with this approach," presidency spokeswoman Saida Qarash told Bloomberg by telephone.

Tunisia's coalition government has, like its predecessors, struggled to revive an economy battered in the wake of the 2011 uprising that ousted President Zine El Abidine Ben Ali.

Terrorist attacks, including a suicide bombing in the capital last week, along with repeated strikes by labor groups and political infighting have hampered efforts to stimulate growth and cut costs, key elements in a reform program backed by the International Monetary Fund.

Nidaa Tounes called the reshuffle illegal, with party official Reda Belhadj describing it in a press conference Tuesday as a “coup against the path to democracy.”

Tunisia Holds Key Rate in Defiance of IMF on Stubborn Inflation

Essebsi has said he would no longer work with Ennahda, a moderate Islamist party that controls 69 seats in parliament, second only to the increasingly-splintered Nidaa Tounes. A faction within the party is headed by Essebsi's son, and has been pushing for Chahed to either step down or go to parliament to seek a vote of confidence.

Chahed, who continues to count on the Islamists' support, may win parliamentary approval for his cabinet changes over the president's objections. Law professor Jaouhar Ben Mbarek said Essebsi's approval wasn't needed so long as the reshuffle didn't include the defense and foreign ministers.

"It can be said today clearly that this government became the government of the Ennahda movement," Noureddine Ben Ticha, a political adviser to Essebsi, said by phone.

The appointment of Rene Trabelsi as tourism minister is a rare move in a region where Arab Jewish populations have drastically dwindled after many were expelled or left following the creation of Israel and the Arab-Israeli war in 1948. Roughly 1,000 Jewish Tunisians remain in the country.

--With assistance from Samer Khalil Al-Atrush.

To contact the reporter on this story: Jihen Laghmari in Cairo at jlaghmari@bloomberg.net

To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Tarek El-Tablawy, Amy Teibel

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