Treasury Secretary Jesus Silva Herzog today announced Mexico's request for a radical restructuring of the entire foreign public debt due in 1982, 1983 and 1984, a sum he estimated at $25 billion.
Silva Herzog told the Congress that last night "the last messages went out to the international financial community, to a little more than 1,400 credit institutions distributed throughout the world" asking for the new terms of repayment.
"We have requested the conversion of all short-term debt to a medium-term indebtedness of eight years, with four years of grace," said Silva Herzog. Mexico has suspended payment of debt principal since August, when it nearly ran out of dollars.
He estimated the short-, medium- and long-term debt coming due through the end of 1984 at "about $20 billion." But at the same time he said "a request has been made for new resources, fresh resources during 1983 in the sum of about $5 billion."
Silva Herzog said "the first reactions we have received from an important part of the international financial community are highly favorable." He cited these reactions as recognition of "the enormous possibilities our development has in the short and medium term."
The minister, a carryover from the Cabinet of ex-president Jose Lopez Portillo, described the project as "probably the most complex financial operation that has taken place in the financial history of the world."
The message came as the 10-day-old administration of President Miguel de la Madrid continues changes ranging from tax reform to radically revised exchange controls in an effort to pull the country out of an economic crisis that has threatened not only its internal peace but the stability of the world banking system.
According to figures cited earlier this week by de la Madrid, Mexico's external public debt rose from $34 billion in 1980 to $53 billion in 1981 as falling oil prices and rising interest rates pushed Mexico's economy from boom to nearly bust in the last administration.
In 1982, by de la Madrid's estimate, the external public debt, including $8 billion assumed when the nation's banks were nationalized Sept. 1, will total $69 billion. If private-sector debt is included, Mexico owes foreign creditors $83 billion.
Some sort of restructuring has clearly been in the offing and reports here and in the United States have said the International Monetary Fund may be pressuring Mexico's creditors to come up with new loans to supplement the $3.84 billion that the IMF agreed upon in principle last month.
Estimates of that supplementary package ran to about $6 billion, considerably more new money than private bankers had initially expected to lend Mexico next year.
As Silva Herzog formally presented the nation's austerity budget, and faced hours of questioning from the Congress, he found the programs under sharp attack by leftist opposition deputies. They said the main burden of the austerity will fall on the poor.
Leftists suggested that the new system of more flexible exchange controls announced yesterday was a sell-out to business interests.
Silva Herzog tried to pull back sowewhat from statements by Central Bank Director Miguel Mancera last night that emphasized plans eventually to phase out controls in favor of a free-floating exchange rate that would attract desperately needed dollars.
He suggested that the new free exchange would be limited basically to "tourism and the border," adding that "we are continuing with controls" but "looking to avoid distortions." He said the new system would not encourage speculation.
But the treasury chief generally stuck to the thesis that the basic fiscal policy should be to "reduce spending and raise income."