Mariano Rajoy, Spain's newly elected prime minister, selected a well-known former deputy finance minister and investment banker to spearhead his government's efforts to pull the euro zone's fourth-largest economy out of its worst crisis in decades.
Spain's new finance minister will be the 51-year-old Luis de Guindos, an economist who held various positions, including deputy finance minister, in the governments of conservative Prime Minister José María Aznar during the 1996-2004 period. Later, he headed investment bank Lehman Brothers in Spain, a financial-sector think tank and has been a frequent commentator in the local press.
A good communicator and English speaker, Mr. de Guindos will assume the dual challenge of pushing through tough overhauls at home while shoring up international confidence in Spain, a key task at a time of soaring borrowing costs. As he isn't a member of Mr. Rajoy's Popular Party, he is viewed as independent in Spanish political circles.
Mr. Rajoy's cabinet formation comes just over a month after his conservative Popular Party won a landslide victory in general elections, making Spain the third ailing euro-zone economy to see a change of government in recent months after administrations in Italy and Greece collapsed over their inability to push through economic overhauls demanded by the European Union and financial markets.
Mr. Rajoy has promised to make reducing the country's unemployment rate—now above 21%—and meeting its deficit-reduction commitments with the EU his top priorities.
In a break with usual practice, the veteran politician waited until taking his oath of office earlier Wednesday before announcing the ministries that will make up his government and the people that will head them.
Overall, Mr. Rajoy has cut the number of ministries to 13 from 15, though he created a new budget ministry that will assume responsibility for budget and tax issues. It will be headed up by Cristóbal Montoro, 61, previously the Popular Party's chief economic spokesman. Mr. de Guindos's finance ministry will have responsibility for overall economic policy.
Mr. Montoro also held various positions in the Aznar governments of 1996-2004, including that of budget minister. The economic overhauls made during those years are largely credited with helping to ensure that Spain entered the euro in 1999 and to transform the country into one of the currency area's chief growth engines until the global financial crisis struck in 2007. Some critics, however, have charged that those same policies encouraged the formation of Spain's massive housing bubble, the fallout of which continues to weigh heavily.
"The combination of de Guindos and Montoro is great news," said Angel de la Fuente, head of Kepler Capital Markets in North America. "They both have experience from the Aznar government and de Guindos knows financial markets well."
Although Mr. Rajoy had pledged the foreign-affairs ministry would be the most important in his new government, helping to raise Spain's profile in international economic forums, he chose the relatively unknown José Manuel García-Margallo to head this ministry. Mr. García-Margallo, 67, who was a member of the first democratic parliament after the death of Gen. Francisco Franco, has been a member of the European Parliament for the past 17 years.
Mr. Rajoy appointed Madrid's popular mayor, Alberto Ruíz-Gallardón, a moderate with broad appeal across party lines, as justice minister.
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