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News Article

CCE Calls for a National Agreement

By Gabriela Mastache | Wed, 04/08/2020 - 10:35

For the private and public sector, the magnitude of the economic crisis created by the COVID-19 is not the same, said Luis Niño Rivera, President of ABM. The banking sector believes the economic measures announced by President López Obrador fall short to reality: “the dimension of the problem that we perceive does not match with what the President sees,” said Niño de Rivera to reporters when leaving Palacio Nacional.

Niño de Rivera mentioned that the programs and plans presented by the president account for barely 2 percent of the country’s GDP, which means that they do not reach MX$500 billion (US$20.7 billion). In places like the US, emergency programs reach 15 percent of their GDP while Germany presented a program that accounts for 20 percent of its GDP.

Niño de Rivera is hardly the first member of the private sector to lament the economic plan that the current public administration has put into motion. Carlos Salazar, President of CCE, said that the door of the Mexican government had closed and Gustavo de Hoyos Walther, President of COPARMEX, said that it had become unfeasible to “reach agreements” with the president.

In light of this situation, the private sector is trying to find solutions to address the current pandemic. On Tuesday, CCE called on unions, social organizations and businesses to create the Acuerdo Nacional en Favor de México (National Agreement for Mexico) to face the COVID-19 crisis and protect employments, salaries and family income. Salazar Lomelín said that the private sector needs to “locally organize as a civil society, considering the lack of a government that can organize us, guide us and that somehow drives our activities.”

As part of the actions that CCE is fostering is saving MSMEs through actions that guarantee liquidity, including having large companies adopt an MSME, performing advanced purchases, paying suppliers in less than 30 days, generating a platform for factoring and avoiding sanctions between particulars.

According to estimates from CCE, the lack of a plan from the government and the business sector will lead to a GDP fall between 7 and 10 percent, inflation rates ranging between 6 and 10 percent, an exchange rate of MX$25 and unemployment of between 800,000 and 1 million people. A national agreement, meanwhile, would lead to a GDP fall of 2.5 percent and inflation rates between 3 and 5 percent, an exchange rate between MX$21 and MX$22 and unemployment of between 300,000 and 400,000 for 2020.

Despite calls for unity, not everyone is happy with CCE’s actions. Businesses from Jalisco have said that they do not recognize the CCE as a valid interlocutor for their interests and have voiced their interest in setting up dialogue tables directly with President López Obrador.

 

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Gabriela Mastache Gabriela Mastache Senior Journalist and Industry Analyst