Mexico´s Minister of Finance Resigns: Goodbye Fiscal Discipline

MEXICO - In Brief 09 Jul 2019 by Mauricio Gonzalez

Carlos Urzúa quit surprisingly as Mexico’s Minister of Finance. His letter of resignation is short and tough. He mentions there have been many discrepancies on economic issues in AMLO’s government, and he disliked that some actions have been decided without enough foundation and particularly that (presumably AMLO) has imposed some public officials that have no knowledge and experience in financial matters. This signals that AMLO's government is staring to crack between the moderates headed by Urzúa and the non-moderates in many other ministries and the legislature. Urzúa's resignation is bad news on several fronts: preparations for next year fiscal Budget are about to take shape next month; Pemex business strategy should be published also in the following weeks; GDP is in a sharper than expected slowdown, already hurting employment growth and household economy, without a clear government strategy on how to face it. Even though the new Minister Arturo Herrera (some of his bio is at the end of this brief) and the former minister Urzúa belonged to the same group of competent financial public officials, the former will have a hard time preserving fiscal discipline for many reasons, the main one being many of his colleagues are not prone to market friendly policies. The most visible group strongly in favor of reinforcing the presence of the State in economic affairs is headed by Rocío Nahle, the Minister of Energy, Manuel Bartlett, head of CFE, the power company, Octavio Romero, CEO at Pemex, Xavier Jiménez Espriú, Minister of Transportation and Communications and Irma Eréndira Sandoval Minister of Public Administration (Comptroller) and others in the legislature, like Rica...

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