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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc -- Ignore unavailable to you. Want to Upgrade?

To: cuemaster who wrote (60)	9/2/1998 8:04:00 PM
From: SOROS	Respond to of 1151

MEXICO CITY (AP) -- President Ernesto Zedillo delivered his state-of-the-nation address Tuesday night, assuring a nervous country that his government is taking steps to control rising crime and economic turmoil. Zedillo also defended the government's bank bailout proposal, which has become Mexico's hottest political issue. And he criticized cynical displays of impunity" by financiers accused of looting the nation's banking system. In a wide-ranging speech to an increasingly critical opposition-led Congress, Zedillo also defended his administration's record in education, health care, environmental and other issues. He called on Mexicans to combat the nation's problems through cooperation and democracy. "We Mexicans have fought for democracy because this is the system that allows us to confront challenges," he said. He outlined his government's economic achievements since the 1994 peso crisis: steady growth with unemployment falling and inflation kept under control. Zedillo also promised to propose tough judicial reforms aimed at both common crimes such as robbery and financial crimes. "The citizens are rightfully demanding laws that protect them," he said. "Public security is something the state owes to its citizens. "I will propose punishments much more severe for crimes of a financial and fiscal character, which have grave repercussions for the country," Zedillo said of the bankers accused of fraud. Zedillo's 1-hour, 40-minute speech lacked some of the fanfare of previous addresses. Unlike in other years, the governing Institutional Revolutionary Party, or PRI, didn't bus in supporters to rally on behalf of the president. He spoke to a Congress that has just completed its first year led by the PRI's opposition and has angrily fought his proposal to assume the debts of the bank savings protection fund. Most of the debts, now worth about $55 billion, followed the 1994 peso crisis. At the time, Zedillo's government, without Congress' approval, agreed to take responsibility for the debt. Zedillo said if the government hadn't acted then, the results would have been devastating. "With the collapse of the banking and payment system, the entire nation's economy would have been paralyzed," he said. "That would have meant the immediate unemployment of millions of people and many other serious social consequences." Opposition parties say taxpayers are being asked to pay the debts of still-wealthy millionaires. Sen. Gabriel Jimenez Renus of the center-right National Action Party said in a speech before the presidential address that the proposal reflects "the brazen arrogance" of Zedillo's presidency. Global economic conditions have taken a toll on the country. Plunging prices for oil, which funds much of the federal budget, have forced the government to cut spending. Worldwide turmoil in stock and currency markets has dropped the Mexican stock market to levels not seen since 1995. The peso has lost about 27 percent of its value over the past year, renewing fears of inflation and of growth-stifling interest-rate hikes. Zedillo said the government has done the best it can to cope with the problems and that he expected it to grow an average of 5 percent from 1996 to 2000. In his speech, Zedillo never mentioned the problems in the southern state of Chiapas, where the Zapatista National Liberation Army staged an uprising in January 1994 in the name of greater democracy and Indian rights. Talks have been stalled for two years, and tensions remain high between Zapatista sympathizers and government supporters. The government has been criticized for failing to reach a peace.

To: cuemaster who wrote (60)	9/6/1998 2:34:00 PM
From: SOROS	Read Replies (3) \| Respond to of 1151

Dallas Morning News - 09/05/98 Demand falls as rates soar; lending to resume when economy stabilizes Associated Press MEXICO CITY - With interest rates surging and demand plummeting, Mexican bankers said Friday they had temporarily stopped lending money to consumers for purchases of cars and homes. ''Under current market conditions, it's better to wait and see,'' said Araceli Espinosa of Grupo Financiero BBV-Probursa. Mexico's financial markets have been battered by the turmoil that rattled Asia and now Russia. The national currency, the peso, has been tumbling to new lows almost daily. On Friday, it closed at a midrate of 10.22 to the dollar, off the 10.14 rate of the previous day. The stock market, too, has been shaken, and interest rates have jumped. Mexican stocks tumbled for a second day Friday on concern about higher Latin America risk. The Bolsa index fell 57.22 to 3045.17, recovering late in the day from a drop of more than 133 points. ''The granting of consumer loans has been temporarily suspended,'' said Vicente Rodriguez, spokesman for Grupo Financiero Bancomer. ''We also decided to restrict new mortgages in the face of the current situation of volatility and high interest rates.'' Most Mexican banks had been making car loans with a fixed interest rate based on the average interbank interest rate, which surged 2.46 percentage points to 39.67 percent on Thursday. The rate has risen by 17.97 percentage points in the past month as the central bank restricted liquidity in the money market to contain inflationary pressures and currency volatility. As of June 30, BBV-Probursa's outstanding consumer loans stood at around 640 million pesos, or $63.1 billion, representing only about 2.8 percent of total outstanding loans, Mr. Espinosa said. ''No one expected interest rates at these levels, and that's why we're now very careful,'' he said. Mr. Rodriguez said the bank plans to resume consumer lending as soon as rates stabilize. Other financial institutions, such as Monterrey-based Grupo Financiero Banorte, registered such low demand for consumer loans that new applications had fallen to almost zero. ''We're able to analyze applications, but nobody wants new loans. With these interest rates, there's just no demand,'' said a Banorte spokesman, who declined to be identified.