Mexico’s money head quits suddenly

Press, 19 June 1986, Page 10

Mexico’s money head quits suddenly

NZPA-Reuter Mexico City Mexico’s Finance Minister, Jesus Silva Herzog, resigned yesterday in what bankers and diplomats said probably heralded a toughening of the country’s stance with creditors to whom it owed SUS9B bill ion. A Finance Ministry spokesman said Mr Silva Herzog had resigned for personal reasons and that his successor, Gustavo Petriccioli, head of National Financiera, the State development bank, would take over immediately. Bankers said Mr Silva Herzog’s resignation was probably because his conciliatory approach to the international financial community was out of step with Mexico’s repeated determination to

demand that its creditors make real concessions in talks on new ways of paying the debt. They said it was unlikely that Mexico would take any radical steps, such as declaring a moratorium on interest payments. The sources said they had noticed distinct annoyance in the last few weeks among Finance Ministry officials, who felt their demands that creditors share the sacrifices demanded by Mexico’s economic crisis were not being taken seriously. Banks have consistently rejected proposals linking interest repayments with the price of oil — on which Mexico depends for 65 per cent of its export income — or of taking deep cuts in their interest rate charges.

Mr Silva Herzog resigned when talks between Mexico and the International Monetary Fund (IMF) were at a critical juncture.