Mexicans gag on Clinton's greenbacks

As American troops overran Mexico City's Chapultepec Castle in September 1847, a group of young Mexican cadets wrapped themselves in their national flag and jumped from the ramparts to their deaths rather than surrender to the gringos. Within five months, the vanquished Mexicans were forced to relinquish almost half their territory to their expanding northern neighbour, including Texas, New Mexico, Arizona and southern California. The US, of course, had a heart. It paid out $15m in compensation.

To understand Mexico's complex relations with its big neighbour, it is essential to consider the trauma ingrained just a century and a half ago. Mexicans love to wear baseball caps, love American football, and risk their lives to cross the border in the hope of work or a better life.

Yet their inferiority complex is counter-balanced by a polite disdain for the American way of life. As for Americans, they look and act more foreign in Mexico than tourists from almost anywhere else in the world.

All the more surprising then to see a Mexican newspaper headline last week that screamed, in giant letters, "Viva Clinton". You only had to look at the sub-heading, however, "Money, money, money", in English, to get a sense of the paper's sarcasm. President Bill Clinton had just announced he would bypass Congress and organise a $47.8bn loan guarantee scheme, using funds from the US Treasury, the International Monetary Fund and the Bank for International Settlements.

His surprise move came after Republicans and Democrats in Congress stalled voting on the President's original proposal for a $40bn loan guarantee scheme using US funds alone. If the Mexican President, Ernesto Zedillo, looked relieved in a broadcast lateron Tuesday, it was hardly surprising. The Banco de Mexico revealed later that the country's foreign exchange reserves, standing at $30bn a year ago, had plunged to less than $3.5bn. With its foreign debt payments estimated at more than $50bn this year alone, the message was clear. Mexico, until two months ago darling of US and other investors betting on high returns from "emerging economies", had been on the verge of default.

Like Mr Zedillo, Mexico's Bolsa (stock exchange) expressed relief, shooting up 10 per cent after Mr Clinton's announcement. The peso, too, sliding almost daily since December's devaluation, turned the tide against the dollar.

In the less-than-subtly named "Yuppie's Sports Cafe" in Mexico City, young brokers celebrated over imported Budweiser beer. Apart from their day's gains at work, the brokers could take comfort in the fact that the "Bud" might now keep flowing.

The falling peso had threatened to slash US exports to Mexico from last year's estimated $50bn to around half that figure, and to make the import of American beer prohibitively expensive. While the peso continued to strengthen, the stock exchange slippedback, as investors returned to a sense of realism over Mexico's economic crisis and Mr Zedillo's growing domestic political problems.

Criticism of the Mexican President grew as it emerged the US had drafted "side letters" laying down distinctly political conditions for US assistance, including a crackdown on mojados(wetbacks) who slip across the border, tougher moves against powerful Colombian-linked drug cartels and less support for the Cuban leader, Fidel Castro.

As with the North American Free Trade Agreement (Nafta), it was noticeable how little the average Mexican, excluding the investors and business people, knew or cared about Mr Clinton's package. Among those who did, the reaction was perhaps weighted towards those who felt the big bail-out was another humiliation from the northern neighbour and that it aimed to rescue investors rather than helping Mexicans.

Such sentiment was fuelled by a series of remarks from US politicians, including Mr Clinton himself but notably from his Secretary of State, Warren Christopher. "It [the loan package] is about American leadership, in this hemisphere and in the world," MrChristopher said. "It is about American jobs, the security of our borders. Only the United States has the capacity to offer this leadership."

Hardly surprising then that many Mexicans saw Mr Clinton's package as saving the skins - or wallets - of banks and wealthy investors who had pumped short-term money into Mexico and pulled it out in panic after Mr Zedillo devalued the peso.

It is one of the fundamental problems of the Mexican economy that only 20 per cent of the much-touted "international investors" have put their funds in the concrete, job-creating economy. The rest were attracted by short-term gain through high interest rates, at first happily pocketing their profits, but now whingeing over their losses.

On the political front, Mr Clinton's package will give oxygen to a government and party the US has criticised for human rights abuses, which has been linked with drug cartels and which may only remain in power because Mr Zedillo and his predecessor, Carlos Salinas de Gortari, spent the nation's reserves to hide the extent of the economic crisis and ensure the continuation in power of the ruling Institutional Revolutionary Party (PRI) in elections held last August.

In an article highly critical of "our accidental President" - referring to the fact that Mr Zedillo stood in after the original PRI presidential candidate, Luis Donaldo Colosio, was assassinated - the Mexican writer Carlos Fuentes noted that "a minority (of Mexicans) were living with an eye on the New York stock exchange, the majority with an eye on the price of beans". Warning of the danger of a power vacuum in Mexico, Fuentes wrote: "The financial and political crisis of Italy and Germany after the First World War led not to democracy but to fascism."

Start your day with The Independent, sign up for daily news emails
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Robert De Niro has walked off the set of Edge of Darkness
news The Godfather Part II actor has an estimated wealth of over $200m
Arts and Entertainment
Fearne Cotton is leaving Radio 1 after a decade
radio The popular DJ is leaving for 'family and new adventures'
Robbie Savage will not face a driving ban
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
Life and Style
Nearly half of all young people in middle and high income countries were putting themselves at risk of tinnitus and, in extreme cases, irreversible hearing loss
health Nearly half of all young people in middle and high income countries are at risk of tinnitus
It was only when he left his post Tony Blair's director of communications that Alastair Campbell has published books
people The most notorious spin doctor in UK politics has reinvented himself
Arts and Entertainment
arts + ents
Life and Style
Arts and Entertainment
James Franco and Zachary Quinto in ‘I Am Michael’
filmJustin Kelly's latest film tells the story of a man who 'healed' his homosexuality and turned to God
Arts and Entertainment
Public Service Broadcasting are going it alone
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Sauce Recruitment: Retail Planning Manager - Home Entertainment UK

salary equal to £40K pro-rata: Sauce Recruitment: Are you available to start a...

Ashdown Group: Front-End Developer - London - up to £40,000

£35000 - £40000 per annum: Ashdown Group: Creative Front-End Developer - Claph...

Recruitment Genius: Product Quality Assurance Technologist - Hardline & Electric

£18000 - £24000 per annum: Recruitment Genius: The role in this successful eco...

Ashdown Group: QA Tester - London - £30,000

£28000 - £30000 per annum: Ashdown Group: QA Tester - London - £30,000 QA Tes...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower