Explainer: Mexico constitutional reforms more likely with super-majority in sight

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MEXICO CITY - Mexican President-elect Claudia Sheinbaum's ruling Morena party and coalition partners are close to securing a super-majority in both chambers of Congress, which would pave the way to passing controversial constitutional reforms.

Below is a look at the potential moves that have markets and investors concerned, and led to a sharp decline in Mexican asset prices on Monday.

LAST-DITCH EFFORT

Sheinbaum's mentor, outgoing President Andres Manuel Lopez Obrador, proposed a series of constitutional reforms in February, some of which critics argue would eliminate much-needed oversight bodies, erode checks and balances and concentrate more power in the executive branch.

Now, with a two-thirds majority locked in the lower house of Congress and within his grasp in the Senate, Lopez Obrador will overlap with the newly elected lawmakers in his final month in office in September. Lopez Obrador on Monday suggested he would make a last-ditch effort to ram them through before handing the baton over to Sheinbaum.

"I'm going to talk it over with Claudia ... because we presented the proposals that are in Congress, to see which of those initiatives we can push for and get approved," Lopez Obrador said at his daily press conference.

Concern about the shakeup sent stocks falling over 6% and the peso as much as 4.3% lower.

INDEPENDENT OVERSIGHT BODIES

Among the proposed changes, Lopez Obrador wants to scrap the constitutionally-enshrined freedom of information body INAI, federal anti-trust agency COFECE, development evaluation agency Coneval and telecoms regulator IFT.

It would also put the energy ministry in charge of energy regulator CRE and national hydrocarbons commission CNH, both of which are now independent and which, like the other autonomous bodies, Lopez Obrador charges with fostering corruption.

OVERHAULING THE ELECTIONS AUTHORITY

Throughout his administration, Lopez Obrador often lambasted and bumped heads with such agencies, including the National Electoral Institute (INE), which he is seeking to completely overhaul.

As many as 700,000 people filled the streets of Mexico City in February to protest of the proposed dismantling of the INE.

The reforms are a way of "instituting electoral reform to cement Morena's political hegemony; lowering the bar for public referendums to obtain legal validity," said Nicholas Watson, managing director o...

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