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President's praises sung down south

Few Mexicans thought they would see the day when a leading newspaper carried the headline "Viva Clinton!" But the evening newspaper Ovaciones felt the need to sing the US President's praises after he took it into his own hands to organise Mexico'sfinancial bail-out. The headline was perhaps aimed more at selling papers than reflecting joy in the streets. But Bill Clinton's surprise move to bypass Congress and organise $47.8bn (£30bn) of loan guarantees delighted the Mexican government, bankers and businessmen and sent the peso rising against the dollar.

The Mexican currency gained around 7 per cent yesterday, continuing its gains from Tuesday when Mr Clinton announced his plan. The Bolsa (stock exchange), after gaining 10 per cent during Tuesday - its biggest one-day jump in seven years - eased back as investors took profits and viewed the longer-term picture.

Given the two nations' long history of mutual distrust, President Ernesto Zedillo's response to Mr Clinton's plan - under which the US Treasury, the International Monetary Fund and the Bank for International Settlements would stand guarantor for $47.8bn in loans to help pay off Mexico's debts - was unprecedented.

Looking relieved, he addressed the nation on television and said: "I want to express our sincerest gratitude to Mr William Clinton, President of the United States, for his solidarity and the absolute respect he has shown towards the people and governmentof Mexico."

Even if private relations are cordial, public kowtowing to the US has always been frowned on. Although Mr Zedillo described the bail-out plan as "strictly a financial operation, which in no way puts our sovereignty at risk," he immediately came under renewed attack from his left-wing opposition.

The Party of the Democratic Revolution called for an extraordinary session of the Mexican congress to discuss the Clinton package, saying it would sink Mexico more deeply into debt. Mr Zedillo countered that the Clinton package "will not increase our debt but will be used to transfer short-term, high-cost debt to longer-term debt less costly to the nation."

Many remained concerned about the political conditions Washington is said to be attaching to the bail-out package, including curbs on illegal immigrants, a crackdown on drug cartels, less support for Cuba and more privatisation of state enterprises.