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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > International > Article Home Business & Finance News U.S. Politics International Technology Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Vote leaves Mexico reforms in opposition's hands Mon Jul 6, 2009 7:40pm EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Catherine Bremer MEXICO CITY (Reuters) - A worse-than-expected congressional election defeat for Mexico's ruling conservatives has left President Felipe Calderon's economic reform agenda firmly in the hands of the opposition. Voters tired of a recession and crime wave handed victory at Sunday's mid-term vote to the Institutional Revolutionary Party, or PRI, which has flourished in opposition since it was ousted in 2000 from seven decades of one-party rule. Calderon's National Action Party, or PAN, moved Mexico into a new era of democracy with the victory over the PRI nine years ago but it has failed to create the jobs it promised, leaving millions to cross the U.S. border illegally in search of work. Mexicans have praised Calderon's war on drug gangs, but are worried by a surge in brutal cartel murders and kidnappings, and Calderon's defeat now risks leaving him a lame duck. A determined former lawyer, Calderon wants economic reforms like tax and energy overhauls to be part of his legacy. Bumped down to second place in Congress, his party will only achieve a tax reform seen crucial for Mexico's credit ratings if the PRI backs it. The PRI has left behind its authoritarian past, and some investors hope it will end its old habit of stalling reforms as it eyes 2012 presidential elections and will instead favor laws to dynamize the sputtering economy. PRI leader Beatriz Paredes said on Monday the party has a "very clear" agenda of the need for deep economic changes and solutions to the economic crisis. Her comments helped pare overnight losses in the peso, and Barclays Capital analysts called them "encouraging". Other analysts took the remarks with a pinch of salt, noting the party must avoid irking its old-school support base. Its intentions regarding a tax reform may not become fully clear until a proposal is voted on in September. "The PRI is clearly a front-runner to win in 2012, so they have an incentive to make sure the economy is in good shape," said Damian Fraser, head of Latin American research at UBS. "(But) the big uncertainty over what the PRI is going to do remains an uncertainty and I don't think will be clarified over the next few weeks -- I don't think it will be clarified until the day of the vote on any specific legislation," he said. RATINGS AGENCIES WAIT-AND-SEE Mexico is a top U.S. trading partner, supplying it with everything from oil and cars to avocados and strawberries. The U.S. downturn has battered Mexico more than other Latin American countries, and unemployed youths are an easy target for drug gang scouts, seeking new recruits to replace the hundreds killed each month in cartel turf wars. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Late checks on Indonesia poll lists ahead of vote Also On Reuters Commentary: Stress testing the consumer Analysis: U.S.-Russia nuclear deal: spin or big cut? 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Slideshow Most Popular on Reuters Articles Video Obama trips up over Russian leadership tandem Travel more than doubles risk of blood clots: study Chinese go online to vent ire at Xinjiang unrest Xinjiang protests resume as death toll hits 156 | Video Google's Dark Day RPT-PREVIEW-Media players plot survival in Sun Valley U.S. hospitals offer $155 billion for health reform: report Obama praises Putin at first meeting | Video Romance rocks wizard world in new Potter movie Michael Jackson book a headache for Jackie O Most Popular Articles RSS Feed Video China riots leave 140 dead Economy to take center stage at G8 Calm after China riots Tickets for Jackson memorial Obamas dine with Medvedevs Swiss fans watch Federer triumph Jackson memorial - a tough ticket U.S., Russia agree on arms cuts Part monkey, part sheep Calm after Zelaya denied landing Most Popular Videos RSS Feed We want to hear from you Join the Reuters Consumer Insight Panel and help us get to know you better Please take a moment to complete our survey Reuters.com: Help and Contact Us | Advertise With Us | Mobile | Newsletters | RSS | Labs | Archive | Site Index | Video Index Thomson Reuters Corporate: Copyright | Disclaimer | Privacy | Professional Products | Professional Products Support | About Thomson Reuters | Careers International Editions: Africa | Arabic | Argentina | Brazil | Canada | China | France | Germany | India | Italy | Japan | Latin America | Mexico | Russia | Spain | United Kingdom | United States Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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