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AMLO Update: Why He’s Cautious About Taking On the Banks

López Obrador’s team pulled in the reins on Congress, after a proposal to limit bank fees hit markets and the peso.
ULISES RUIZ/AFP/Getty Images

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Highlight of the Week

AMLO’s economic team conducted damage control Thursday after Morena senators proposed legislation to limit bank fees, dealing Mexico’s main stock index its worst single-day loss in seven years. 

On Thursday afternoon, AMLO’s pick for finance secretary Carlos Urzúa effectively hit pause on the proposal, asking legislators for a financial impact study before moving forward. In a statement his team called for more coordination on economic issues from both houses of Congress, saying the “goal of improving Mexicans’ quality of life … won’t necessarily be achieved without taking public finances into account.” 

It was the second time in recent weeks that López Obrador’s team has dealt with jittery markets. Observers say the president-elect may see a need to tread lightly given the negative economic fallout of his cancellation of Mexico City’s new airport project. But in this case the balance of public opinion – including from many who were critical of AMLO’s airport decision – seems in favor of taking on the banks.

What they’re saying: Jonathan Heath offers a grave view of Mexico’s economic outlook; Mario Maldonado on AMLO’s signaling to markets; an overview of AMLO’s new economic appointments.

A Critical Week on Security

López Obrador’s team says it will present its security strategy on Nov. 14, following weeks of public forums with victims and their families. 

Alfonso Durazo, AMLO’s pick for public security secretary, said that the plan would not include the purchase of new arms or technology for fighting crime. Instead, the strategy is expected to focus on cracking down on corruption, identifying areas of priority for military and police deployment, and the eventual creation of a national guard. A change to drug policy is also in the works, as Morena legislators this week presented a bill to legalize the growth, sale and use of marijuana.

The announcement comes as the Supreme Court plans on Nov. 12 to take up a highly controversial law that critics say gives the military expansive authority over public security. Civil society groups have called on AMLO to use his majority in Congress to replace the law, which was passed by President Enrique Peña Nieto in 2017. But despite reservations, members of AMLO’s transition team say they’ll wait until the court weighs in before seeking any changes to the legislation. 

What they’re saying: Jorge Javier Ramírez on the implications of the Supreme Court case; Alejandro Hope on the connection between drugs and violence

Briefs

AMLO met with Morena legislators on Monday to discuss implementation of his 14 legislative priorities, including regulation of a new attorney general’s office and a new austerity law. 

Urzúa said the government would not touch Central Bank reserves to pay for spending priorities. The transition team’s budget proposal for next year is due in Congress by Dec. 15. 

Opposition legislators called on López Obrador to rescind Nicolás Maduro's invitation to attend his inauguration on Dec. 1. 

AMLO says his next public consultation, this time on a $7.5 billion train project in Mexico’s southeast, will take place in December.

Quote of the Week

“It was sensationalist, yellow journalism. But it’s normal, that’s liberty, that’s democracy.”

López Obrador responded to the cover of news magazine Proceso that featured an unflattering photo of him behind the headline “The Ghost of Failure.”

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Russell is AQ’s correspondent in Mexico City

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Any opinions expressed in this piece do not necessarily reflect those of Americas Quarterly or its publishers.


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