Mexico: No more Pact

The leftist Partido de la Revolución Democrática (Party of the Democratic Revolution, or PRD) has pulled out of the Pact for Mexico, creating an acute crisis (link in Spanish), according to Mexican daily El País.

But how much of a crisis is it?

The Pact for Mexico, created in 2012 by then-new president Enrique Peña Nieto’s Partido Revolucionario Institucional (PRI), the PRD, and the Partido Acción Nacional (National Action Party, or PAN) ended 15 years of gridlock in the fractious congress,

allowing Mr. Peña’s administration to secure passage of wide-ranging bills on telecommunications, tax increases and education.

Congress is taking up the issue next week. But lawmakers from the PAN and the ruling Institutional Revolutionary Party, or PRI, are expected to rewrite the president’s bill to give private oil companies a bigger role in the state energy sector, including contracts that allow them to share oil production. The president’s August initiative called only for sharing the profits from the oil, but not the oil itself.

“If they insist on an energy reform that privatizes Mexico’s oil income, the government is going to generate a situation of enormous social and political instability,” said PRD president Jesús Zambrano in an interview. “We’ll have a very hot Christmas, we’ll launch protests on all fronts.”

Together, the PAN and PRI have the two-thirds majority in Congress required to pass the proposed constitutional changes for the energy overhaul. And the president has already passed most of his major initiatives under the pact.

Mr. Peña Nieto regretted the PRD’s decision to leave the Pact for Mexico, but vowed to press on with reforms.

From the PRI’s point of view,

The ruling Institutional Revolutionary Party, or PRI, is hoping its energy reform will spur faster economic growth, and the departure of the Party of the Democratic Revolution (PRD) from the accord is likely to push the debate closer to a more business-friendly proposal backed by the center-right.

The Senate is expected to vote on the political overhaul as early as Tuesday, with a vote on the energy bill soon to follow.


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