Starting layout

The newly president formed his cabinet taking into account the coalition agreement with National Party. From Colorado Party, appointed Luis Brezzo for the Ministry of National Defense, Guillermo Stirling for the Ministry of the Interior, and Didier Opertti for the Ministry of Foreign Relations, all of them from Foro Batllista sector; from Lista 15 sector appointed Alberto Bensión for the Ministry of Economy and Finance, Horacio Fernández Ameglio for the Ministry of Public Health, Lucio Cáceres for the Ministry of Transport and Public Works and Alfonso Varela for the Ministry of Tourism; from other sectors of Colorado Party appointed Raúl Lago as the Secretary of the Presidency, Leonardo Costa as the Prosecretary of the Presidency and Ariel Davrieux as the Director of the Office of Planning and Budget.^[3]

From their coalition partners, the National Party, appointed Antonio Mercader for the Ministry of Education and Culture, and Carlos Cat for the Ministry of Housing, Territorial Planning and Environment, both from Herrerismo sector; from other National sectors were appointed Gonzalo González for the Ministry of Livestock, Agriculture and Fisheries, Sergio Abreu for the Ministry of Industry, Energy and Mining, and Álvaro Alonso for the Ministry of Labour and Social Welfare. After the new Ministry of Sports was created, it was appointed, also from this party, Jaime Trobo.^[3]

Rupture of the coalition with National Party and resignation of Nationalist ministers

With the economic crisis in the background, on 28 October 2002 the Board of National Party decided to remove their colleagues from the Executive, resolution that was not adopted unanimously but 9 against 6, supporting it Herrerism and National Alliance factions, while against it Wilsonist Current and some Intendants from the Uruguayan interior. The resolution accused the government of Jorge Batlle of pathological ineptitud to make decisions. The president of National Party Luis Alberto Lacalle even dared to say that Nationalists were responsible of allowing Batlle being elected and if it was possible to go backwards he would change his votes. On the other hand, those opposing this resolution argued that this was an act of irresposibility.^[4]

This resolution was submitted to be deliberated by the National Convention of the party to decide if it would be kept, modified or revoked, scheduled for the next 3 November. The day of the meeting the Convention decided by 291 votes supporting it and 112 against it to maintain the resolution to withdraw their ministers as it was decided by the Board. This conference was held under a troublesome and hostile climate, where each band discredited and insulted the other. The factions that supported the Conventions' resolution were Herrerismo and Alianza Nacional, while against it were Desafío Nacional, Correntada Wilsonista and some Intendants from the Uruguayan interior.^[4]

On 13 November, Jorge Batlle, already aware of these series of events since the initial resolution of National Party's Board, accepted the resignation of the Nationalist ministers and appointed to replace them several politicians from Colorado Party.^[4]

Conflicts with unions

During the presidential term there was a high level of trade unions' conflicts already since the beginning of the period. At a national level, before the beginning of the 2002 economic crisis, there was a protest promoted by the trade union confederation PIT-CNT with political purposes in order to counteract the economically liberal policy that was being applied by the Batlle government. This union conflict eventually led to a general strike on 31 May 2000 to protest against the Law of Urgent Consideration from that time and the denationalization of companies stated in that law, but also in other work matters such as wage improvements. This strike, with several protest around the country, had in some cases violent incidents with stonings and insults.^[5]

At a departmental level, in Montevideo raised a conflict between union ADEOM, made of Montevideo's government functionaries, and the executive branch of Montevideo led by intendant Mariano Arana, due to the parftial privatization of the urban waste disposal service.^[5]

Since 23 September, in the University of the Republic started a strike with cease of activities, promoted by docents' and functionaries' unions, also supporting it the Uruguayan Federation of University Students, in order to achieve improvements in the Udelar's budget. This strike lasted until near the year's end when the strike was terminated by the students, without achieving most of what they wanted in the next Budget Law.^[5]

Environment and climate change

Livestock foot-and-mouth epidemic crisis

Uruguay was a FMD-free without vaccination, but on 25 November 2000 a FMD outbreak was detected in the rural settlement paraje del Chiflero, Artigas Department, that resulted in border closures in Argentina and Brazil for meat from Uruguay, the halt of overseas exports and foreign slaughterhouses refusing to accept Uruguayan meat. This meant the loss of important markets with the already lost Mexican market when this country refused to accept Uruguayan meat around September when the disease had not entered Uruguay yet but there were outbreaks in Argentina and Brazil. The government ordered as an emergency measure a policy of "sanitary rifle", killing over 5000 animals, temporarily containing the outbreak. By then Uruguay already had lost the FMD-free without vaccination distinction that is desiderable to get the best access to international markets.^[10]

However, in May 2001 another FMD outbreak arose, therefore the government decided to start a massive vaccination campaign. The epidemic brought itself with serious economic and social consequences: the livestock relocation was banned in the whole country, the slaughters and exports of any meat product and the sport hunting were also banned as well. Containers in transit with Uruguayan meat already sold were returned to Uruguay as they were rejected. Due to the loss of markets, thousands of slaughterhouses' workers went to unemployment insurance and there were financial issues with the payment chain of livestock industry. The agricultural fairs with livestock were suspended, and the courses in education institutions including primary, secondary, vocational and teacher education centers were temporarily suspended in several departments.^[10]

Human rights

Taxation policy

The period 2000-2003 featured a series of fiscal reforms where the rates of value added taxes were raised and reached highest ever rates in the Individual Income Tax (IRP).^[17]

Most of the changes, done to deal with the recession and economic crisis, mostly hit on the people who receive fixed income and pay IRP, Value Added Tax (IVA), Internal Specific Tax (IMESI), and so on. However, a specific feature of his economically liberal ideology was on to expand reductions to taxes of employer payments for social welfare of workers of certain groups such as the agricultural, industry and transport, besides of to exempt from Property Tax (IP) to the agricultural market, with the reasoning of boosting the economic activity of the companies and thus creating more employment positions.^[17]

2002 economic crisis

Permission to build the first pulp mill plants

Rupture of relations with Cuba

In April 2002, president Batlle announced that he would broke diplomatic relations with Cuba after some incidents that occurred with the Cuban president Fidel Castro. This rupture originated from the proposal of resolution on the situation of human rights on Cuba submitted by Uruguay to be considered before the United Nations' Human Rights Commission, which asked Cuban government to improve the human rights of Cubans, but Castro in response to this called Batlle as "haggard and a wretched Judas", and said that "no one will remember him [Batlle] in eight or ten years".^[18] The resolution was then approved, and Raúl Castro, his brother, said that Uruguay "was assigned the task of licking the boots of the empire".^[19]

Since mid-2021, Uruguay adopted a stance where it condemned the violation of human rights in Cuba but at the same time opposed the United States' embargo on Cuba and other economic sanctions. At the International Conference on Financing for Development in Monterrey, Batlle said about Cuba that "it has been using the same economic theories for 44 years by which is, notoriously, going through a hard time", and later, he condemned the situation of the human rights in that country, in addition to say that it was not a democracy. In April of that year, Cuba's foreign minister Felipe Pérez Roque branded Uruguay as "kneeling and servile", saying that the country had exchanged its vote at the UN for meat sales. Due to these statements, Uruguay's foreign minister Didier Opertti with Enrique Estrázulas, ambassador of Uruguay before Cuba, gave him a deadline to retract himself. At that time, the Uruguayan authorities began working on a resolution draft on the situation of human rights in Cuba and to allow the entry of international observers to the island. Uruguay then promoted at the Summit of Heads of State of Rio Group the approval of the resolution, where it was appreciated "Cuban efforts [in matter of] social rights of the population, despite an adverse international environment" and asked the Cuban government to further advance in the observance of human rights.^[20]

Strengthening of relationship with the United States

During this administration, Uruguay's relationship with the United States grew together. Batlle met president George W. Bush in 2001, when the United States president thanked him for the help with a situation with China that arose during the visit of the president of China Jiang Zemin to Uruguay, during which Batlle spoke with Jiang in German. During the conversation, the Chinese statesman told Batlle that he had a problem to solve with Bush, referring to the incident of the island of Hainan where a United States' spy plane crashed against a Chinese military plane, that made the latter fall, and after that the American aircraft landed without answering the warnings made by the Chinese air operators, and because of that the 24 crew members of the American aircraft were arrested. This led Bush to request the release of the American military crew. Batlle suggested that the negotiations should start from Bush's father, George H. W. Bush, so that through him would reach better to his son. From then on, a dialogue between the two coutries began to resolve the situation.^[21][22]

During the Third Summit of the Americas, Batlle strongly defended the deployment of the Free Trade Area of the Americas in order to achieve free trade between the member countries, raising with a sense of urgency that the sooner is established, the better.^[22]

Agreement on promotion and protection of investments between Finland and Uruguay

Bloomberg scandal, or declarations of Batlle on the Argentines

On 3 June 2002 was revealed in Argentine television that during an interview with journalists Martín Boerr and David Plumb of Bloomberg network, held on 30 May and recorded in Liberty Building —seat of the Executive—, president Batlle made controversial statements regarding the Argentines. These controversial statements were expressed during the talk Batlle was having with Boerr after the end of the interview he was performing, that due to their nature, was not intended to be recorded. Although an official from Presidential Office asked the cameraman if the camera was already turned off, the cameraman said that it was turned off and that they do not record off-the-record talks, however the camera was still recording. The camera then recorded the conversation, with controversial comments regarding Argentine politicians:^[23][24]

Dear friend, in 2001 the situation of Argentina [is related to] Argentine problems. [They are] a bunch of thieves from first to last! Do you understand? As Mr. Barrionuevo said: "if we stop stealing for two years, we will be better". Now, don't compare Argentina against Uruguay! Or are you a complete ignorant of the reality of Argentina and the reality of Uruguay? Do you know how things are handled in Argentina? Do you know the kind, volume and scale of corruption in Argentina?

— Jorge Batlle

and also about the then interim president of Argentina, Eduardo Duhalde:^[23]

But how could I suggest Duhalde anything, my dear? I can't suggest Duhalde anything. He doesn't have any political influence, he doesn't know where he's going to. How could I suggest Duhalde anything?

— Jorge Batlle

The recording quickly was viralized and soon there were repercussions in public sphere of Argentina and criticism from the political parties in opposition in Uruguay. The president of Argentina demanded an appointment the ambassador of Uruguay in Argentina asking for explanations. Batlle realized about the mistake he committed and gave apologies via phone call, but Duhalde demanded the apologies to be performed personally in Buenos Aires. Batlle then gave a press conference in Liberty Building where he told his reasons and the next day he travelled to Quinta de Olivos in Buenos Aires to meet Duhalde. During this public meeting Batlle repeatedly apologized for what he said, claiming that their comments were made because he was "driven crazy" and angered during a time when Uruguay was at the edge of falling into a crisis, and ended his speech visibly touched. After that, president Duhalde, stiff during the whole meeting, said that the incident was brought to an end and greeted Batlle.^[23][25]