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Highlight of the Week
Mexicans’ optimism in the wake of Andrés Manuel López Obrador’s inauguration on Dec. 1 doesn’t mean investors are in a forgiving mood.
On his second full day in office, AMLO’s economic team announced a $1.8 billion buyback of bond debt tied to the Mexico City airport project the president plans to cancel. Markets initially welcomed the move before paring expectations. If investors don’t accept new terms on remaining bonds (as some have indicated they will not) there is a scenario in which the government would ultimately shell out around $6 billion in reimbursements.
If that happens, it could have a significant impact on AMLO’s spending plans, as Ana Thaís Martínez and Jorge Andrés Castañeda point out in this article for Nexos. AMLO has promised not to raise taxes or take on debt to pay for ambitious social programs; his 2019 budget, which is due in Congress by Dec. 15, will test that commitment.
What they’re saying: Nacha Cattan on whether AMLO’s numbers add up; why construction of the airport will continue, even if the airport won’t; a debate on what the buyback says about AMLO as president on “Tercer Grado.”
AMLO and the Supreme Court
Mexico’s judiciary has quickly become a source of opposition to the new administration. Hundreds of judges have filed complaints claiming that Morena-backed legislation to reduce public officials’ salaries, set to take effect in January, is unconstitutional. The dispute may end up in the Supreme Court, where the president has few clear allies.
But AMLO will soon have a chance to push the balance of power slightly more in his favor. On Thursday he announced his list of three nominees to fill a vacancy on the 11-member Court. Two of the president’s choices have strong public ties to Morena and are expected to generate opposition in the Senate, which will either pick from the president’s selections or reject his list entirely. That leaves Juan Luis González Alcántara, a controversial pick in his own right, as some analysts’ favorite to fill the post.
AMLO will be able to name a second nominee to the court in February, when Justice Margarita Luna Ramos’ term expires.
What they’re saying: Carmen Aristegui on why González Alcántara’s past should prevent him from being selected; a look at AMLO’s three candidates in Huffpost Mexico; Elisa Alanís weighs in on AMLO’s picks.
Parents of the 43 missing Ayotzinapa students were on hand at the National Palace on Monday as López Obrador ordered the creation of a truth commission to investigate their children’s case.
The administration will freeze new oil and gas auctions for three years, with López Obrador urging private companies with existing contracts to deliver on promised investment and crude production. Officials also postponed an electric power auction that had been set for February, prompting outcry from renewable industry groups.
The new administration has deployed some 50,000 federal, military and naval police officers across the country to aid in public security. In a ceremony on Dec. 2, the president said he’d opted to create a national guard as part of his security plan because Mexicans “trust the armed forces.”
After meeting with governors on Tuesday, AMLO agreed to limit his federal “superdelegates’” role coordinating state security policy.
Quote of the Week
“It’s inhumane to use the government to protect individual interests and then have it disappear when it comes to protecting the good of the majority.”
AMLO criticized neoliberal economic policy in his inaugural speech to Congress, saying in Mexico the term had become synonymous with corruption.
Russell is AQ’s correspondent in Mexico City