- The Washington Times - Monday, June 3, 2002

TORONTO A power struggle in Canada's governing Liberal Party brought the second Cabinet shuffle in a week yesterday, 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.
Mr. Martin's departure comes less than two weeks before he was to host the Group of Eight 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 yesterday, "There's no change in economy policy that will come from this appointment."
The shift follows Mr. Chretien's announcement Friday that he intends to serve out his third term as prime minister, dashing Mr. Martin's hopes of an easy midterm transition to succeed him.
Mr. 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.
Mr. Chretien has acted quickly to answer accusations 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 Mr. Martin's departure from the Cabinet, Mr. Chretien praised him for outstanding service to the country but said nongovernment issues made it impossible for them to work together.
At a news conference, Mr. Chretien denied that Mr. Martin was fired, but his letter made clear there was no alternative to Mr. 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.
Mr. Martin said at a news conference he would stay on as a member of Parliament.
"In the last several months and particularly in recent days, the professional relationship between the prime minister and myself deteriorated to the point of becoming unproductive," Mr. Martin said.
Mr. 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 Mr. Chretien would step down in 2003 to smooth the way for his succession.
An overt campaign by Mr. Martin's supporters to position him as Mr. 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 Mr. Martin and others.
Mr. Chretien has blamed the undeclared battle to succeed him for recent leaks that contributed to accusations of influence-peddling and cronyism by members of his Cabinet.


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