ABSTRACT
The peso crisis that started in late 1994 has clearly demonstrated the fragility of Mexico’s neoliberal restructuring. Contrary to the rhetoric of President Carlos Salinas de Gortari (1988-94), his policy of economic liberalization proved far from soundly based. Insufficient reserves rendered Mexico’s economy very sensitive to shocks. The coming into force of the North American Free Trade Agreement (NAFTA) had further increased the import of consumption goods, thereby deepening Mexico’s trade and balance-of-payments deficit which was paid for by short-term bonds. Instead of governing a newly designated First World country, President Ernesto Zedillo Ponce de León (since 1994) immediately had to face untenable financial problems that were created and neglected by his predecessor.
