Final vote counts released over the weekend suggested that Mexico’s left-wing ruling party and its allies would secure a supermajority in Congress, potentially enabling the coalition to pass sweeping changes to the constitution.
Official statistics from last week’s election show that Morena’s party and its partners appear to be on track to gain a two-thirds absolute majority in the lower house of Congress.
In the Senate, where the coalition appears unlikely to gain an outright majority, the smaller number of seats means it may only need to attract the support of a handful of opposition lawmakers to amend the constitution, analysts said. Party President Mario Delgado said in an interview that building these alliances was “relatively easy to achieve.”
“We are now a dominant force,” Mr. Delgado added. “It’s up to the people.”
The final makeup of the legislative body remains unclear, as some seats in Mexico’s Congress were appointed through proportional representation in August. Legal challenges could also affect how seats are allocated.
But Morena has come close enough to total dominance to trigger a backlash in one area the party cannot afford to ignore: financial markets.
Investors’ alarm was on full display in the tumultuous post-election days, with Mexican stocks pummeled and the peso suffering its worst week since the pandemic.
Financial analysts said concerns centered on Morena potentially using his broad powers to enact constitutional changes, which critics warned could undermine existing limits on presidential powers.
The proposals, first proposed by Andres Manuel López Obrador, include plans to eliminate independent regulators and appoint judges and election officials through popular votes, which critics warn could make They are more susceptible to political pressure. Among other concerns, investors fear subverting the judiciary could reduce their certainty of getting a fair hearing in disputes.
Janneth Quiroz Zamora, director of economic research at brokerage Monex, said: “The feeling in the market is that under the leadership of the Morena party, with the proposal of this plan, there is a fundamental Sexual changes may be coming “The biggest concern is the possible removal of restrictions on executive power. “
As if to calm markets, incoming President Claudia Scheinbaum, a protégé of López Obrador, announced last Monday that current Finance Minister Rogelio La, seen as a stabilizing force, would Mires De Lao, will stay at work.
“He was a great public servant who provided certainty for good financial and economic management,” she said.
Ms. Sheinbaum won the presidency with the highest number of votes in decades, and Morena secured most of the governorships.
Blanca Heredia, a political analyst in Mexico City, said her initial comments encouraged investors that “the government is sensitive to their concerns.” Ms. Heredia said this was “mainly because of the speed of response,” noting that the new president “needs and wants the economy to grow.”
But on Thursday, Ignacio Mier, leader of the Morena party in the lower house of Congress, appeared to announce that the party would seek to approve constitutional changes in September before López Obrador Step down and Sheinbaum takes over.
The peso fell again. Hours later, Mill walked back his statement on a radio show and said no changes would be made hastily.
Ms. Sheenbaum later told reporters the measures would be subject to extensive dialogue. She also posted a photo of herself meeting with executives from investment firm BlackRock. “They are committed and passionate about increasing investment projects in Mexico,” she said on social media.
Mr. Delgado, the party president, said Mr. López Obrador and Ms. Scheinbaum needed to agree on how to move forward with the plans.
“These reforms will need to be discussed, their scope and final version will be presented in Congress, and the pace of approval will be determined by the president,” he said, referring to Ms. Sheinbaum.
The upshot, analysts say, is that markets could become a regulating force in a political system where parties have so much control.
“I do think this adverse reaction from the market is going to cause them to do a very thorough rethinking of what they’re going to approve in September and how they’re going to approve it,” said Joan Domene, senior Latin America economist in Mexico City. Oxford Economics, an American economic consulting firm.
López Obrador, however, seemed undeterred. At his regular news conference Friday morning, the president reiterated his commitment to the changes and appeared to minimize the peso’s losses, saying, “Justice prevails over markets.”
Analysts say the mixed messages suggest investors’ influence will depend on whether those leading Morena — including López Obrador — actually listen to them.
“The market is a political straitjacket,” Mr. Domene said. “But not everyone is equal.”
Emiliano Rodriguez Mejia Miriam Castillo also contributed reporting.
