President reaffirms reform agenda

Speaking to an invited audience at the National Palace, President Felipe Calderón reaffirmed his 10-point ‘Agenda for Change,’ as he marked the start of the second half of his government. His most extensive remarks were devoted to the need to strengthen public finances. He said that despite addressing the immediate shortfalls in the 2010 budget, “the truth is that we are very far away from a solution to the structural problems that confront the Mexican State.” He called again for a broad debate on fiscal reform and a second round of energy sector reforms. He also repeated his call for a political reform “to generate the conditions that will enable us to overcome the institutional paralysis that has blocked the country from reaching agreements on fundamental issues.” (Presidencia 11/28, Universal 11/29)

Supreme Court declares SCT regulations for granting radio and TV concessions unconstitutional

The Supreme Court, by a vote of 8-2, declared that the SCT regulations issued in January 2009 by President Calderón were unconstitutional. These regulations gave the Secretary of Communications and Transportation the exclusive power to award, extend, or revoke radio and TV concessions. The Court found that this power belonged to Cofetel, the telecommunications regulator, and could not be assigned to the Secretary (though Cofetel is part of the SCT). Columnist Miguel Ángel Granados Chapa wrote: “This counterfeit introduces yet another conflictive element in the topsy-turvy panorama of radio and TV, where the competitors are constantly litigating to avoid the application of norms that are disadvantageous to them.” (Universal 11/23, Reforma 11/28)

Congress fails to back legal challenge to closing Luz y Fuerza

Efforts by the PRD and PT in Congress to challenge the liquidation of Luz y Fuerza on constitutional grounds fell well short. Only 132 Deputies of the required 250 signed the resolution, as the PRI stood aside. If the resolution had passed, it would have obliged the Supreme Court to review the liquidation decree. After the motion failed, Labor Secretary Javier Lozano promptly reopened the centers for former employees to sign up for the buyout payments. The second round of buyouts will provide only 70% of the amount that was available in the first round, and will be available until December 23. (Universal 11/25, 11/26)

Carstens responds to critique of economic policy

Finance Minister Agustín Carstens responded vigorously to the comments made earlier in the week by Nobel prize winning economist Joseph Stiglitz.  Speaking at a conference in Mexico, Stiglitz said that Mexico’s response to the global financial crisis had been “unusual” with a “relatively weak” fiscal stimulus in contrast to the actions of many other countries. He added that Mexico needed to diversify its exports, and that relying on economic recovery in the U.S. was unlikely to result in a strong recovery since the world’s growth is concentrated in Asia.  Stiglitz also said the government need to invest not only in infrastructure but also in technology, education, and programs for improving economic opportunity. Carstens responded by noting that the government had to respond to the twin crises that hit Mexico­–the global recession and the 800,000 b/d decline in oil production. “We did not have the option of contracting more debt. One has to act responsibly, and this is what President Calderón decided and did,” Carstens said. Economy Secretary Ernesto Cordero said that Stiglitz “needed to read a bit more on Mexico” before making comments. The Templo Mayor column observed: “Wow. Looks like the Minister of Finance has decided to celebrate the anniversary of the Revolution by shooting at Nobel Prize winners.” (Universal 11/19, 11/20, Reforma 11/20)

Chamber approves 2010 expenditure law

The full Chamber of Deputies voted 425 to 25, with 4 abstentions to pass the 2010 expenditure law. The PRI, PAN, PVEM, PANAL, and Convergencia all voted unanimously in favor. The PRD voted 45-18 to support the budget, while the PT voted 4-7 against. The vote took place in the early morning hours of the 17th, with the clocked stopped, since the legal deadline for passing the budget was the 15th. (diputados.gob.mx)

Expenditure budget passes

The budget commission of the Chamber of Deputies unanimously passed the 2010 expenditure budget at 4:30 am, after failing to meet the midnight legal deadline. PRI coordinator Francisco Rojas postponed four times the meeting of the full Chamber of Deputies, as factions within the party negotiated the reallocation of funds between the states and to different programs. The full Chamber is expected to vote on the package today. The final compromise was reflected in a basket of Ps. 96.6 billion of resources to be reallocated, an increase from the original proposal of Ps. 85 billion. Total expenditures were pegged at Ps. 3,176 billion – only marginally higher than the proposed budget sent by the Government.  One of the items that emerged from the congressional negotiations was the requirement that the Ministry of Finance present to congress an austerity plan by March 15 for longer-term improvements in the use of public resources. PRI deputy Sebastián Lerdo de Tejada explained, “We can’t ask the citizen to tighten his belt and not demand that the … executive, judicial, and legislative authorities do the same.”

The Templo Mayor column observed: “Almost everyone is content with the slicing up of the budget pie. The priistas are congratulating themselves because they … tied the hands of the federal government and got millions and millions as a gift for their governors. The panistas are also jubiliant; despite the dark warnings, at they end of the day they salvaged the resources for the three [social] programs dear to Felipe Calderón: the leafless Proarból, the coveted Oportunidades, and the supercharged Seguro Popular. (Excelsior 11/16, Universal 11/16, Reforma 11/16)

Luz y Fuerza strikers disrupt city; buyout advances

The SME electrical workers union carried out protests across Mexico City, including blocking traffic on several expressways. There were scattered arrests and occasional use of teargas, but the demonstrations were largely peaceful. The Mexico City police estimated 100,000 marchers reached the Zocalo to hear defrocked union chief Martín Esparza speak. The Government’s offer of a special bonus payment to Luz y Fuerza workers who accepted the liquidation expired; more than 27,000, or 61% of those eligible, accepted the buyout. (Universal 11/12, 11/15)

President renews attack on private sector

In an interview aboard the presidential aircraft en route to Singapore for the APEC summit, President Felipe Calderón blamed the private sector for the failure of the government’s original tax proposal. “The business community acted with complete liberty: they were very critical of the government and broadly criticized the package. … This weakened the possibilities [for passage],” he said. Columnist Salvador García Soto noted: “The President’s verbal bombshells … confirm what we have been saying for several weeks: the relation between the Chief Executive and a good part of the private sector, above all the most influential names, has deteriorated to the point where it has become public. … A reflection of this distancing is that many of the principal captains of industry have started to build bridges to groups in the PRI.”  (Reforma 11/12, Universal 11/14)

Calderón booed

The President was booed by fans at the inauguration of the new soccer stadium in Torreón. The video was widely circulated on You Tube.  TV Azteca, which broadcast the game, lowered the volume on the crowd noise to minimize the rare public show of disrespect for a sitting president. “The lusty booing that President Calderón received … is revealing of the enormous black mark that the people have put as their response to the fiscal reform. It has not passed unnoticed by society that the incapacity of the Calderón administration to put the brakes on government spending and the ease with which it decided – once again — to lay on the people already hit by the recession a higher tax burden, considered unjust and disproportionate,” said columnist Manuel J. Jáuregui. (Reforma 11/12, 11/13)

Luz y Fuerza worker buyouts enter final week

Labor Secretary Javier Lozano announced that more than 22,000 Luz y Fuerza workers—about half the total—have accepted the government’s buyout offer, at a cost of Ps. 12 billion. The buyout offer expires November 14. A judge granted the SME union an injunction to prevent declaring the labor contract between the SME and Luz y Fuerza terminated, but Lozano said the action was a technicality that would not stop the process from moving forward.  CFE, the other national electric utility, will start re-hiring Luz y Fuerza’s workers this week under its own labor agreement. Some 9,500 workers have asked to be rehired by CFE or get government assistance in setting up their own businesses. (Reforma 11/8)