TUNIS (Reuters) - Tunisia's parliament approved a coalition cabinet on Thursday including secularists, Islamists and smaller parties, in the latest step in its transition to full democracy following a 2011 uprising.
Four years after its uprising against autocrat Zine El-Abidine Ben Ali, Tunisia has been held up as an example of political compromise and democratic transition with new constitution and free elections.
The cabinet headed by Prime Minister Habib Essid, which includes members of the secularist Nidaa Tounes and the Islamist Ennahda party, was approved by 166 members of the 217-seat parliament.
Nidaa Tounes member Slim Chaker was named finance minister, and Taib Baccouche, also from Nidaa Tounes, will be foreign minister. Ennahda was given employment ministry and several other junior minister posts.
Essid's new government will have to push through tough economic reforms demanded by Tunisia's international lenders and continue a campaign against Islamist militants. Tunisia is also a major source of jihadi fighters traveling to Syria
"Our priority will be to strengthen measures to combat extremism and strengthen security capabilities to confront terrorism and the protection of the democratic transition," Essid said in parliament. In the 217-seat parliament, Nidaa Tounes holds 86 seats and its ally, the liberal, secular UPL party has 16 seats. Ennahda holds 69 seats, the Popular Front 15 and Afek Tounes eight.
With its political transition complete, Tunisia's new government must tackle high public spending and politically sensitive reforms to subsidies. Jobs, high living costs and economic opportunities are the main worry for most Tunisians.
"We need to start immediately economic reforms including rationalization of subsidies, review of the tax system, reform of the banking sector and cutting public spending," Essid said.
The International Monetary Fund agreed in 2012 to support Tunisia with a two-year credit program worth $1.74 billion. In exchange, Tunisia agreed to keep its deficit under control and make the foreign exchange market more flexible.
Tunisia sees economic growth accelerating to 3 percent in 2015 from an estimated 2.5 percent in 2014 while the budget deficit is expected to narrow from 5.8 pct in 2014 to 5 pct in 2015.
Editing by Dominic Evans