Will Calderón reappoint Ortiz?
The government's weak position in congress may prompt some of the country's better economic policymakers to jump ship. Agustín Carstens, the finance minister, has played a nearly impossible hand brilliantly but rumours have already started to circulate that he is going. If he goes, Guillermo Ortiz, the governor of the Banco de México, who has a long history of difficult relations with President Calderón may also go.
Under the constitution, Ortiz's six-year term is coming up for renewal: the central bank governor is appointed on 1 January of the fourth year of every presidential term (for Calderón that is 1 January 2010). Ortiz has been president of the central bank since 1998.
The departure of two such steady figures as Carstens and Ortiz would trigger major doubts about what might happen in Mexico. The economic challenges facing Mexico are enormous. The economy will contract by at least 7.5% in 2009, which will be its biggest contraction since 1994. Unlike 1994 there is no guarantee of a rapid bounce-back.
Politically and socially, the government is fighting a desperate war against drug gangs. Worryingly, the death toll in Ciudad Juárez has started to rise again, after being squashed, initially, in March by a huge military deployment.
This combination of problems has started rumours in Mexico City that President Calderón has realised that he cannot take the risk of not reappointing Ortiz, with whom he has long had difficult relations. Ortiz blamed Calderón for going back on his word to support him over pension reform in 1996 when Ortiz was finance minister.
Calderón then was leading the Partido Acción Nacional (PAN) as national president. The PAN opposed the reform for short term political reasons but the Partido Revolucionario Institucional (PRI), which still had a majority in the lower house of congress, was able to get the reform approved. The PRI copped the electorate's hostility to the reform in the mid-term elections of 1997 in which it lost its majority in the lower chamber.
Even a few months ago there were long odds on Calderón reappointing Ortiz for another six year term. The governor can be appointed for as many terms as he would like provided he is under 65. Ortiz is 61.
The assumption at the beginning of 2009 was that Carstens would probably replace Ortiz. The problem now is that there is no obvious alternative to Carstens, who began his career at the central bank as did so many successful Mexican technocrats.
One possible runner to succeed Carstens is Ernesto Cordero who currently runs the big spending ministry, the Secretaría de Desarrollo Social. Cordero is close to Calderón but he has a negligible international financial profile.
An outside possibility for either the finance ministry or the central bank is Manuel Medina Mora, who is the brother of the current Procurador General de la República, Eduardo and the head of Citigroup in Mexico and a director of the US parent company.
The main technocrat at the finance ministry is Alejandro Werner, but he is a non-runner because he is not Mexican by birth, which the finance minister has to be.