European Union President Herman Van Rompuy says he’s tired of Mexico telling him how to resolve his region’s debt crisis. Credit-default swaps trading shows he’d benefit from the advice.
Traders are more confident about Mexico’s ability to pay obligations as the economy grows almost 4 percent, versus a contraction in Europe, and the nation has half the debt relative to its size as the euro region. Central bank Governor Agustin Carstens said in July European leaders should speak with one voice and devote “far bigger resources” to deter speculators. Van Rompuy said Sept. 7 he’s fed up with “countries like Mexico preaching to us” when it has a “civil war at home.” Drug violence in Mexico claimed more than 47,000 lives since 2006.
“They should be taking advice from people who have real experience with similar problems,” said Jerome Booth, the London-based head of research at Ashmore Investment Management, which oversees $63 billion of emerging-markets assets. “The idea that organized crime in Mexico has any bearing on the issue of macroeconomic management is absurd. The amount of leverage in the European Union and the amount of policy denial are much, much worse than in Mexico.“