President Zedillo Requests Special Session of Congress to Discuss Major Economic & Political Reforms

Article excerpt

President Ernesto Zedillo's administration wants Congress to schedule a special session in the next several weeks to resolve important economic and political issues. Even if the president succeeds, legislators in the special session will not debate the president's request for new legislation governing the failed bank-rescue fund (Fondo Nacional de Proteccion al Ahorro, FOBAPROA). In a meeting with Zedillo and top Cabinet officials in late May, legislative leaders from the five political parties represented in the Chamber of Deputies agreed to consider the president's proposal to schedule a special session to debate many economic proposals submitted by the administration in April. These proposals would include measures to strengthen autonomy for the Banco de Mexico (central bank) and the Comision Nacional Bancaria y de Valores (CNBV) and to allow foreign banks to acquire a greater share of Mexico's largest financial institutions (see SourceMex, 04/15/98). Legislators from the governing Partido Revolucionario Institucional (PRI) pushed for the special session, but delegations of the center-right Partido de la Revolucion Democratica and the conservative Partido Accion Nacional (PAN) declined to commit to such a session. Deputies Dolores Padierna of the PRD and Fauzdi Hamdan of the PAN questioned whether legislators would have sufficient time to prepare for the flurry of complex issues that could be brought up in the special session. Padierna and Hamdan, deputy coordinators for their respective parties in the Chamber of Deputies, said the financial reforms and other matters such as indigenous rights are too complex to force "hurried decisions" in a special session. Instead, Padierna proposed creating working groups to study the issues and draft proposals before the beginning of the next regular session in September. The administration, however, continued to insist that legislators schedule a special session. In the end, leaders of the PRD, PAN, Partido del Trabajo (PT), and Partido Verde Ecologista Mexicano (PVEM) agreed to consult their membership to determine whether a special session should be held in the latter part of August.

Session would not include reforms to bank-rescue fund PRI legislators initially planned to support Zedillo's request that a special session also include debate on the administration's proposal to convert 552 billion pesos (US$62.2 billion) in FOBAPROA liabilities into public debt. But this was squashed by the coalition of four opposition parties in the Chamber of Deputies, which said it would not consider any legislation dealing with FOBAPROA until an independent audit of the bank-rescue fund is completed. The comprehensive audit is expected to take four to five months, meaning legislators will not debate FOBAPROA legislation until sometime in November. "What is clear is that we won't rubber-stamp anything," said legislative leader Porfirio Munoz Ledo of the PRD. In early June, a committee comprising members of the five political parties agreed to hire an international consultant to coordinate a FOBAPROA audit. In a closed-door session, the committee invited 10 US and Canadian banking experts to apply for the position. The list includes former Canadian Central Bank governor John Crow, Massachusetts Institute of Technology (MIT) specialist Martin Feldstein, and eight US and Canadian private consultants. …