The writing has been on the wall for weeks past but it finally came to an end Tuesday, August 30 when Varela read in the Official Gazette that he had been dismissed as Foreign Minister.

His dismissal lead to the resignations of fellow Panamanista party members, Finance and Economy Minister Alberto Vallarino and Housing Minister  Carlos Duboy

The former director of the Public Register, Luis Barrios, announced his resignation announced at noon "for personal reasons."
More resignations are expected to follow.

"I think it's clear: the alliance is over," Varela told the local press as he left the headquarters of the Foreign Ministry, the  organization that  he had led for 26 months.

Varela who heads the Panamanista Party and discovered over the weekend that President Martinellei had reneged on an agreement that he would be the alliance presidential candidate in 2011 says he will continue to serve  as vice president, to defend the interests of the people, striving for transparency and honesty in handling public funds, while committed to making an orderly transition in  a professional manner, "as the country deserves it.”

He told reporters before leaving the headquarters of the Foreign Ministry,   "We leave with our heads held high ... We get to move on."

Varela's dismissal from office of Minister of Foreign Affairs was contained in Decree No. 128 of August 30, 2011, which bore the signature of President Ricardo Martinelli, and was published in the Official Gazette No. 26,890-A on Tuesday.

"I learned of my  dismissal through the Official Gazette," said  the Vice President.

Political commentators were quick to point out that Martinelli now seems to have all the reins of power in his hands, and some predicted an uncertain future for democracy in the country.

During last weekend the Democratic Change Party (CD) that he founded and funded, recruited over 82,000 new members, but stories are already circulating of families coerced into changing their official allegiance for fear of losing their jobs. Many local politicians have joined the CD bandwagon in recent weeks.

Martinelli has twice promised a cabinet shake up. The latest was to have taken place in July, but nothing happened.  Now there will be a raft of new names.