For many, it was only a matter of time. The system that President Andrés Manuel López Obrador has been using to make decisions has been alienating more and more his own Secretaries. There have been difficulties to schedule work appointments with him, massive cabinet meetings where there is no real depth, an inability to cross official information among Secretariats. An extremely vertical structure which generates discomfort inside the administration.
This resentment, off the record up until now, became public last Tuesday morning. Nothing less than with Carlos Urzúa's resignation, a very close ally and friend to López Obrador for over twenty years. The Secretary of Finance presented his resignation with a particularly tough letter, and with extreme hermeticism. No one in his inner circle knew of this. "It came as a surprise, although a foreseeable one", close sources to the official said to LPO.
"I am convinced that everything in economic politics must be done based on evidence, being careful of the diverse effects this may have and free from all forms of extremism, be it right or left-leaning. However, during my tenure, these convictions were not seconded".
Urzúa closes his letter with an anonymous, albeit direct, accusation: "For me, it was unacceptable the imposition of finance officials with no knowledge of public finances. This was motivated by influential players in the current administration with a clear conflict of interests. Therefore, I see myself forced to resign".
A few hours after the letter went public, AMLO announced that Urzúa's replacement would be Undersecretary Arturo Herrera, one of Urzúa's most distinguished alumni at the Colegio de México. The administration rapidly replied to an alarming reaction from the markets. Herrera has a more financial focus, closer to the markets, and he is known for being slightly more orthodox than his predecessor.
Sources inside the cabinet reported to LPO that the new Secretary requested the departure of Raquel Buenrostro, a high-ranking official in the Secretariat, as well as her collaborators. He is also expecting the resignation of the Undersecretary of Expense Victoria Rodríguez Cejas, a solid economist from the same institution. These are fundamentalists of adjustment and reduction of extreme expenses. According to these sources, Herrera would place the responsibility of the political problems generated by the cuts on them. These problems might have provoked the departure of former Social Security Secretary Germán Martínez.
This request would decide Herrera's viability as Secretary of Finance. Should it not be executed, his tenure would be short-lived, and the Government is running out of cards. On Tuesday, at the National Palace, there were barely any other options, except for him.
His appointment is also a sign for the markets since he is seen as a rational Secretary, but it is still to be seen how the internal coexistence unfolds. Herrera disagrees with Alfonso Romo, and is very critical of Pemex's condition, headed by Octavio Romero, and has held public confrontations with Secretary of Energy Rocío Nahle.
Businessmen back him up. He recently was at a meeting with Carlos Salazar, head of the most influential group of industrials, who came from having trouble with Urzúa because of the fate of the oil bids. This back-up will be evident this Wednesday when the President meets with the top 25 businessmen from the heavily-industrial state Nuevo León.
The internal fights
LPO anticipated the historical fights that took place inside AMLO's economic cabinet, two different tribes of economists were skirmishing over the attention of the then-candidate. Alfonso Romo, the businessman from Nuevo León, along with his advisors Abel Hibert and Adrián Rodríguez, took possession of the Alternative Nation Project, the political platform of AMLO's third campaign. "The Historicals", headed by Carlos Urzúa, and his students Arturo Herrera and Gerardo Esquivel, were left aside.
But in an unexpected turn of events, the economic cabinet would fall under Urzúa's hands. Before the election, Romo tried to place Santiago Levy, Vicepresident of the Inter-American Development Bank, as Finance Secretary, and along with a businessman and friend of the President, Julio Scherer, they set up work meetings with the economist. The problem was that Levy is too pro-market for the President's style. He even proposed to raise the taxes to sustain the administration social programs, something unacceptable for López Obrador's vision of the project.
Urzúa would then monopolize the designations in Finance, not without a permanent state of tension between himself and Romo. The businessman kept proposing people linked to him for when the time would come: the Bank of Mexico, the Bank of Development, Pemex, the Energy Regulation Commission, the IRS, and a long list supporting Urzúa. So, was Urzúa referring to Romo in his resignation letter? Obrador's inner circle took note: the reference was directed to a new sub-group of young people, many say close to the President's son, who has been gaining importance in the decisions, many times above the Secretaries.
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