Zapatero's popularity ratings have fallen to an all-time low following unpopular economic reforms [AFP]

Spain's prime minister has named a new foreign minister and appointed a deputy in the country's biggest cabinet reshuffle in seven years.

The move is being seen as an attempt by Jose Rodriguez Zapatero to boost his party's ratings following a series of unpopular economic reforms.

"The time has come for a major overhaul of the government," he told a news conference on Wednesday. "It will be a government of reforms, of definitive economic recovery and employment."

He named Trinidad Jimenez, Spain's health minister, as the new foreign minister, while Alfredo Perez Rubalcaba, the interior minister, was handed the additional portfolio of deputy prime minister and chief government spokesman.

Rubalcaba, who  currently heads the government campaign against Eta, the Basque separatist group, has a high approval rating and is seen by some as a successor to Zapatero.

"He's the heir apparent," Pedro Schwartz, an economist at San Pablo University in Madrid, told the Reuters news agency.

"He's intelligent and efficient and he does reinforce the government."

The prime minister also removed the ministries of equality and housing in a bid to cut costs, incorporating them into the ministries of health and of transport and development.

Dive in popularity

Support for Zapatero's ruling Socialists slid to 29.4 per cent in October, compared to 38 per cent in the same month last year, an opinion poll published last week in the daily Publico said.

The dive in popularity ratings follows an economic crisis that pushed the nation's unemployment rate to more than 20 per cent.

Some 84 per cent of those surveyed said they had "little" or "no" trust in Zapatero, up from 73.1 per cent in October 2009.

His cabinet reshuffle comes hours after the government passed an austere 2011 budget through the lower house.

Spanish workers last month staged their first general strike since 2002 to protest labour market reforms, which cut the nation's high cost of firing workers and gave companies more flexibility to reduce working hours and staff levels in economic downturns.

Zapatero faces elections in 2012, but the media have been speculating about whether he will stand again or hand over the leadership of the Socialist party.

Source: Agencies