Mexico: Facing budget cuts, COFECE defends autonomy

Mexico’s Federal Commission of Economic Competition (COFECE) and the Bank of Mexico have put forward constitutional appeals against the Federal Law of Remuneration for Public Servants presented by the incoming government of Andrés Manuel López Obrador, seeking to reverse the reductions in personnel and resources imposed by the austerity policy being pushed by the new administration.

COFECE argues that the requested budget was approved with savings of $34 million pesos (US$1.6 million) in relation to 2018 and claims that the controversy arose because of uncertainty regarding how the remunerations for public servants should be regulated, as it is classified as an autonomous constitutional body. The Mexican Constitution establishes that skilled or specialized technical work—such as that carried out by the Commission—may have a wage surplus no greater than 50% above that of the President. However, the Budget for 2019 has set the President’s salary as the maximum limit for salaries and remuneration for public servants.

The antitrust regulator explained that the law creates uncertainty and should be corrected in terms of information on the parameters and items that should be taken into account to define the appropriate level of presidential income, so that it this is not a political or discretionary decision.

The case unleashed by these controversies will be one of the first challenges for the incoming president of the Supreme Court of Justice (SCJN), Arturo Zaldivar, who will have to resolve the spat over salaries of qualified officials, as well as issues related to the autonomy and competencies of independent bodies.

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