MEXICO CITY, Dec 8 (Reuters) – A mounting drugs war death toll and concerns that Mexico’s fragile economic recovery will fall victim to the European debt crisis are clouding the outlook for Mexico ahead of a presidential election next July.

DRUGS WAR

Anger is growing about the roughly 45,000 lives that have been lost since President Felipe Calderon launched a war on drug cartels in late 2006, and violence has spun out of control in large areas along the U.S.-Mexico border. [ID:nN15124805]

There are now signs it is moving further to the south. On Nov. 24, suspected drug gang hitmen killed at least 26 people and dumped their bodies near a major landmark in Mexico’s second city, Guadalajara. [ID:nN1E7AN0MZ]

It was the fourth mass public dumping of bodies in regional centers in just over two months, a rash of killings officials blame on brutal turf wars between rival drug cartels.

Local media said a message with the bodies in Guadalajara purported to be from the brutal Zetas gang and was directed at Sinaloa cartel boss Joaquin “Shorty” Guzman.

Officials blamed a group with ties to Guzman for two mass dumpings of more than 60 bodies, seen as a signal to the Zetas, in the eastern port city of Veracruz in September and October.

MEXICO CITY (Reuters) – Slowly but surely, drug cartels have ground down support for Mexico’s ruling conservatives with a trail of dead over the past five years.

Now, President Felipe Calderon’s National Action Party (PAN) is trying to use the same gangs as a quick fix for its fading hopes of re-election next year – by painting rivals for the presidency as corrupt and in the pockets of the cartels.

Calderon’s term in office has been dominated by a bloody conflict with drug traffickers that has claimed 45,000 lives, eroding support for the PAN and turning the drugs war into a make-or-break issue for July’s presidential elections.

Latest surveys show his party is headed for defeat. The PAN is trying hard to taint the image of its bitter rival, the centrist opposition Institutional Revolutionary Party (PRI).

Last month Calderon said some PRI members might consider deals with drug gangs, stirring up claims by critics of the opposition party that it made secret pacts to keep the peace in the 71 years it ruled Mexico until 2000.

And on Tuesday the office of Calderon’s attorney general said it was investigating whether a drug cartel pressured voters to back the PRI in a state election on November 13.

John Bailey, a political scientist at Georgetown University in Washington, said Calderon had played a “double game” by calling for unity in the fight against organized crime – then suggesting his rivals were complicit with the gangs.

MEXICO CITY (Reuters) – Slowly but surely, drug cartels have ground down support for Mexico’s ruling conservatives with a trail of dead over the past five years.

Now, President Felipe Calderon’s National Action Party (PAN) is trying to use the same gangs as a quick fix for its fading hopes of re-election next year – by painting rivals for the presidency as corrupt and in the pockets of the cartels.

Calderon’s term in office has been dominated by a bloody conflict with drug traffickers that has claimed 45,000 lives, eroding support for the PAN and turning the drugs war into a make-or-break issue for July’s presidential elections.

Latest surveys show his party is headed for defeat. The PAN is trying hard to taint the image of its bitter rival, the centrist opposition Institutional Revolutionary Party (PRI).

Last month Calderon said some PRI members might consider deals with drug gangs, stirring up claims by critics of the opposition party that it made secret pacts to keep the peace in the 71 years it ruled Mexico until 2000.

And on Tuesday the office of Calderon’s attorney general said it was investigating whether a drug cartel pressured voters to back the PRI in a state election on November 13.

John Bailey, a political scientist at Georgetown University in Washington, said Calderon had played a “double game” by calling for unity in the fight against organized crime – then suggesting his rivals were complicit with the gangs.

MEXICO CITY (Reuters) – For years after the North American Free Trade Agreement came into force, the main road to riches for many Mexican entrepreneurs was across the border. Now they are increasingly likely to cross an ocean instead.

Mexico’s foreign trade with the United States soared after the North American Free Trade Agreement (NAFTA), which also includes Canada, kicked off in 1994, almost tripling in six years.

But having then become dependent on U.S. demand for 88 percent of exports, Mexican firms were heavily exposed to economic shocks across the frontier, and the economy was battered by the financial crash that hit Wall Street in 2008.

Since the crisis, Mexico has stepped up efforts to limit its reliance on the world’s biggest economy, ratcheting up trade with Latin America, Asia and Europe, aided by a depreciation in the peso against a range of currencies.

After pulling out of recession, Mexico managed to cut its share of exports bound for the United States late last year to less than 80 percent for the first time since NAFTA, and the figure is expected to dip to around 78 percent in 2011.

“Being able to diversify Mexican exports is a priority for us,” said Gerardo Gutierrez, president of Mexican employers’ association Coparmex. “We have 12 free trade deals with 44 countries that we really don’t make enough of.”

With Europe mired in a debt crisis, worries have surfaced that the United States could slip back into recession next year. But economists at HSBC say Mexico’s drive to diversify its export base should make it more resilient this time.

ACAPULCO, Mexico (Reuters) – This city of dazzling hotels and sunlit beaches rose to fame as a playground of Hollywood stars. Today, Acapulco has now earned a very different reputation-for gangland decapitations, kidnappings and extortion.

As Mexico’s drug war grinds on, killings in Acapulco have almost tripled this year to nearly 900, making the Pacific resort one of the most violent cities in the world and the second-deadliest in the country. The endless reports of slayings have kept the drug chaos on the front page even as killing slows in some parts of Mexico, where in 2010 the war claimed a record 15,273 lives.

So horrifying was the death toll that the government, which declared 2011 to be Mexico’s “year of tourism,” has simply stopped publishing a count.

The first destination touted on Mexico’s official tourism website is Acapulco. Outwardly, the beach front is calm, and the city remains studded with hotels, bars and restaurants steeped in its colourful past. But Acapulco’s main promenades have taken on a more sombre aspect. Where cabs once jostled to pick up fares, taxi ranks stand empty; bars awaiting custom blast music into space; and idle waiters straighten chairs at countless tables that line the long boulevards of the Zona Dorada tourist drag.

“This has been really terrible for Mexico’s image,” said Victor Hernandez, bookkeeper at hotel Los Flamingos, a favourite getaway of film stars John Wayne and Errol Flynn. “If there’s no tourism, the economy goes to hell.”

The troubled areas now extend right into the historic square, or Zocalo, just 100 meters from the ocean between the Zona Dorada and the fabled diving cliffs of La Quebrada.

A killing at an internet café there on the afternoon of October 19 was nothing out of the ordinary, said Erika Hernandez, 20.

MEXICO CITY (Reuters) – Mexico picked the head of the national intelligence agency as the country’s new interior minister on Thursday, beefing up the job’s security profile as the government attempts to bring violent drug cartels to heel.

Alejandro Poire, director of the Center for Research and National Security (CISEN), succeeds Francisco Blake, who was killed in a helicopter crash on Friday.

Poire, 40, has never held elected office, and spent more than a year staunchly defending President Felipe Calderon’s army-led crackdown on the drug gangs as national security spokesman before he moved to the CISEN in September.

The bloody conflict against the gangs has dominated Calderon’s presidency, damaging support for his conservative National Action Party and eroding his own popularity.

“Crime is the biggest threat to our society and our citizens,” Calderon said in a televised address, noting that he had chosen Poire “because of his profound knowledge and his vast experience in security matters.”

More than 45,000 lives have been lost in drug-related violence since Calderon sent in the army to crush the gangs shortly after he took power in December 2006.

Calderon has staked his reputation on restoring security to Mexico and analysts say he needs to make clear progress to give his conservative National Action Party (PAN) a chance of retaining the presidency when elections are held in July 2012.

ACAPULCO, Mexico (Reuters) – This city of dazzling hotels and sunlit beaches rose to fame as a playground of Hollywood stars. Today, Acapulco has now earned a very different reputation-for gangland decapitations, kidnappings and extortion.

As Mexico’s drug war grinds on, killings in Acapulco have almost tripled this year to nearly 900, making the Pacific resort one of the most violent cities in the world and the second-deadliest in the country. The endless reports of slayings have kept the drug chaos on the front page even as killing slows in some parts of Mexico, where in 2010 the war claimed a record 15,273 lives.

So horrifying was the death toll that the government, which declared 2011 to be Mexico’s “year of tourism,” has simply stopped publishing a count.

The first destination touted on Mexico’s official tourism website is Acapulco. Outwardly, the beach front is calm, and the city remains studded with hotels, bars and restaurants steeped in its colorful past. But Acapulco’s main promenades have taken on a more somber aspect. Where cabs once jostled to pick up fares, taxi ranks stand empty; bars awaiting custom blast music into space; and idle waiters straighten chairs at countless tables that line the long boulevards of the Zona Dorada tourist drag.

“This has been really terrible for Mexico’s image,” said Victor Hernandez, bookkeeper at hotel Los Flamingos, a favorite getaway of film stars John Wayne and Errol Flynn. “If there’s no tourism, the economy goes to hell.”

The troubled areas now extend right into the historic square, or Zocalo, just 100 meters from the ocean between the Zona Dorada and the fabled diving cliffs of La Quebrada.

A killing at an internet café there on the afternoon of October 19 was nothing out of the ordinary, said Erika Hernandez, 20.

MEXICO CITY (Reuters) – Mexico’s embattled ruling conservatives will enter the 2012 election year with renewed hope if the president’s older sister can pull of an unprecedented win in a state ballot on Sunday.

Luisa Maria Calderon’s capture of the governor’s office of Michoacan would throw sand in the eyes of the Institutional Revolutionary Party (PRI), the favorites to take the presidency in 2012.

In just over six weeks, the sister of President Felipe Calderon has turned an eight point poll deficit against the PRI candidate in Michoacan into a six point advantage, according to voter surveys in the Reforma newspaper, the last on November 3.

A triumph would hand Michoacan to Calderon’s National Action Party, or PAN, for the first time, and may also help Josefina Vazquez Mota, who has taken a lead in some polls to be the PAN’s presidential candidate in 2012.

“If she (Calderon) wins it would show that a PRI victory in 2012 is not a foregone conclusion — as one or two people in the party seem to think is the case,” said Lorenzo Meyer, a political scientist at the Colegio de Mexico.

Next year’s presidential campaign will focus heavily on Mexico’s vicious drugs war, and it has also been the central campaign issue in Michoacan. Candidates have had to avoid the most dangerous areas of the state, a pattern likely to be repeated in next year’s presidential race.

“From the mother who doesn’t know what to do with her daughter to the businessman being extorted, they’re all insisting on the need for security. It’s what people want most of all,” Luisa Maria Calderon said in a television interview.

MEXICO CITY (Reuters) – A leading presidential candidate of Mexico’s ruling party said on Wednesday he would break with government policy and withdraw the army from the fight against drug gangs if he wins the election in 2012.

Santiago Creel, a former interior minister belonging to the conservative National Action Party (PAN), told Reuters that President Felipe Calderon’s military strategy had served its course and that he would change “everything” as leader.

“The direct, frontal, expansive strategy is a strategy that should end with this administration,” said Creel, who is seeking the PAN’s nomination for the presidency.

Deaths from drug-related violence in Mexico have surged since Calderon sent in the army to fight the cartels when he took office in December 2006, damaging support for his party and causing strains in relations with the United States.

Calderon has endured withering criticism from victims of the drug war and opposition lawmakers for his U.S.-backed military approach but he has stood firm, arguing the cartels would have become too powerful if he had not acted.

More than 44,000 people have died in the conflict to date, and Creel said that if elected in the July vote, he would start taking the Mexican army off the streets as soon as he took office in December 2012.

“By my calculations this would be a period of transition of around 24 months,” said the 56-year-old Creel, a descendant of a U.S. immigrant to Mexico of Scottish origin.

MEXICO CITY (Reuters) – Mexican President Felipe Calderon has said politicians in the main opposition party may consider deals with criminals, opening an inflammatory new front in the nation’s presidential election campaign.

Calderon’s blunt remarks about the centrist Institutional Revolutionary Party (PRI), which is favored to win the July 1, 2012 election, are unusual in a country where the president is expected to stay largely aloof from party politics.

Centering on the policy that has dominated his presidency — an aggressive army-led crackdown on drug cartels — his comments risk polarizing opinion on how to restore stability to Mexico, where the drug war has killed 44,000 in five years.

Leading members of Calderon’s conservative National Action Party (PAN), other PRI opponents and political analysts have accused the once-dominant party of making secret deals with drug cartels in the past to keep the peace in Mexico.

In a weekend New York Times interview published a day after he said a state governed by the PRI had been left in the hands of a drug gang, Calderon was asked whether the opposition party might pursue a corrupt relationship with organized crime.

“There are many in the PRI who think the deals of the past would work now. I don’t see what deal could be done, but that is the mentality many of them have,” said Calderon, whom the law prevents from seeking a second six-year term.

Analysts say Calderon is bitterly opposed to the PRI, which dominated Mexico for seven decades until the PAN won the presidency in 2000 under its candidate Vicente Fox.