In a recent development, the Mexican governing coalition MORENA has made progress on its long-awaited judicial reform initiative. Outgoing President Andrés Manuel López Obrador has been advocating for a reform that would involve the direct election of all judges by the people, a move that could have significant implications for the country’s legal system and political landscape.
According to Commerzbank’s FX strategist Tatha Ghose, the reform has faced challenges in the past due to the constitutional requirement of a 2/3 majority for any changes to be implemented. However, with the recent elections in June, the ruling alliance now has the necessary support to push through the reform.
The latest proposal includes over 100 changes to the original plan, with a key modification being the introduction of a staged approach to the election of judges. The first phase is expected to take place next year, followed by a second phase in 2027.
Despite the revisions, concerns remain about the potential impact of the reform on investor sentiment and the Mexican peso. Critics argue that the reform could undermine judicial independence and raise questions about the rule of law in the country.
Analysis and Implications
For investors, the uncertainty surrounding the judicial reform could lead to increased volatility in the Mexican markets. Any perceived threats to the independence of the judiciary may deter foreign investment and affect overall economic stability.
It is crucial for stakeholders to closely monitor the progress of the reform and assess its potential implications on legal certainty and political risk in Mexico. The outcome of this initiative could have far-reaching consequences for the country’s future trajectory and its standing in the global economy.