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Uruguay's economy minister quits amid airline scandal

Uruguayan President Jose "Pepe" Mujica (L) talks with now former Economy Minister Fernando Lorenzo. (AFP)

Uruguay's economy minister resigned today in the face of questions over the alleged irregular sale of government-owned airplanes following the closure of the country's flagship carrier, President Jose Mujica said.

Mujica defended the conduct of Fernando Lorenzo, his minister since March 2010, as local television broadcast images of the economist entering a criminal courthouse.

"He has been a brilliant minister," Mujica said. "We have no doubt about his ethical integrity."

Mujica is considering replacing Lorenzo with the current president of Uruguay's central bank, Mario Bergara, a source with the president's political party told reporters.

Lorenzo was widely respected by investors, but faced growing criticism after the government sold seven airplanes that once belonged to Pluna, the airline the state took over and shuttered in the wake of its bankruptcy last year.

The government has yet to receive payment for the planes, which were bought by a Uruguayan businessman who changed his name before making the purchase.

Pluna had been 75 percent owned by the Leadgate financial group.

Lorenzo's departure will allow him to make statements about the scandal that he might not be able to make as minister, a source with the ruling party told Reuters.

Fernando Calloia, the president of Uruguay's state bank, was also summoned to provide statements to investigators on Saturday about a guarantee the bank made for the purchase of the planes.

Mujica vowed to adhere to the court's ruling.

"We will respect the decisions of the court entirely, as is natural in a law-abiding society," Mujica said.

A source in the economy ministry said that Mujica did not ask Lorenzo to resign.

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Tags:  Latin America  Uruguay  Fernando Lorenzo  José Mujica  Pluna  


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