Mexico's Socialists blockade foreign banks

MEXICO CITY (Reuters) - Thousands of Mexican leftists blockaded the offices of three major foreign-owned banks on Wednesday in a new protest to force a full recount in a July 2 presidential election they claim was rigged.

Protesters surrounded Mexico City offices of U.S.-based Citigroup's Mexican unit Banamex, the Bancomer bank owned by Spain's BBVA and the British giant HSBC They sat on the ground around the buildings and vowed to block access for several hours.

The leftists are backing Andres Manuel Lopez Obrador, who narrowly lost the presidential vote to conservative ruling party candidate Felipe Calderon and claims it was rigged.

Election officials were to begin a recount of votes from 9 percent of polling stations on Wednesday in a bid to clear up the allegations and calm a crisis that has split the country.

But Lopez Obrador is demanding a full recount of all 41 million votes. His protesters have crippled Mexico City for the last 10 days by setting up tents in its Zocalo square and on the main boulevard running through the business district.

They have vowed to extend the civil disobedience campaign with surprise protests across the country this week.

All but one of Mexico's major banks are in the hands of foreign companies and the industry's sell-off has been a symbol of free market reforms in Mexico, so there was little surprise over the election protesters' new choice of target.

"Now it is the banks' turn," said Gerardo Fernandez, a spokesman for the leftist Party of the Democratic Revolution.

BAILOUT

During the election campaign, Lopez Obrador had promised to reopen the books on a controversial $100 billion bailout of struggling private banks by the government during an economic crisis in the mid-1990s.

Most of the big banks that survived the crisis were later sold off to foreign financial giants.

"Banamex is really Citigroup, a foreign bank that ransacks the country," Fernandez said on Wednesday. "It took more than 10 percent of the bank rescue."

Starting on Wednesday morning, judges, election officials and party representatives will spend up to five days checking the tallies at 11,839 voting stations to see if there is truth to Lopez Obrador's claims that he was the victim of fraud.

If the partial recounts show Lopez Obrador closing the gap on Calderon, they could force the electoral court to open more ballot boxes. But if there is no change in the numbers, Lopez Obrador will come under heavy pressure to give up his fight.

Many fear the power struggle could turn violent, posing the biggest challenge to Mexican democracy since President Vicente Fox won power in 2000 and ended seven decades of one-party rule infamous for corruption and fraud-tainted elections.

Mexico's government has tightened Fox's personal security this week and also sent federal police to protect oil installations and the capital's international airport.

Calderon's margin of victory was about 244,000 votes, or just 0.58 percentage points, but he insists it was clean.

His team accuses Lopez Obrador and his Party of the Democratic Revolution, or PRD, of using Mexico's class divide to try to win on the streets what they lost at the polls.

Cesar Nava, a senior Calderon aide, warned on Tuesday that a long battle could undermine Mexico's hard-won stability.

"It will be at risk if the PRD persists with this attitude, with its violent discourse and its attempt to divide the country, split it between rich and poor, right and left, oppressors and oppressed," he said.

Despite fiery rhetoric on both sides and growing tension, there has so far been no violence at any of the protests, and Lopez Obrador insists his campaign will remain peaceful.