Mexico Frees Suspected Rebel To Help Peace Talks, Falling Peso Zapatistas Threatened To Boycott Negotiations After Arrest Of Man Accused Of Helping Lead Uprising

Under pressure to salvage peace talks with rebels and bolster the plunging peso, the government on Friday released a suspected guerrilla leader from prison.

The Attorney General’s Office asked a judge Thursday night to drop illegal weapons charges against Fernando Yanez Munoz, accused by the government of helping lead the 1994 uprising in southern Mexico as Comandante German.

A haggard-looking Yanez, who has denied any links to the rebel Zapatista National Liberation Army, flashed the victory sign and hugged supporters after his release from a Mexico City prison at midday Friday.

“I was arrested for political motives, and I suppose I was released for political motives,” he said. “My arrest was illegal; I wasn’t armed.”

In a subsequent news conference, Yanez thanked the “faceless” Zapatistas for his release. “If they hadn’t put the nation on a path to achieve democracy, justice, and liberty, my case would never have been resolved.”

The Zapatistas had threatened to boycott peace talks following Yanez’s arrest on Saturday. The rebels went on “red alert” on Wednesday, accusing the military of maneuvers and flights over their territory. That was denied by the government.

The threat to the negotiations, coupled with gloomy economic forecasts, sent the peso tumbling Thursday to its lowest level since an emergency bailout package was announced in March.

The peso dropped to 7.235 to the dollar on Thursday, the deepest one-day drop since the peso set an all-time low of 7.45 on March 9. The peso strengthened Friday, closing at 7.065 to the dollar by Friday afternoon. Stocks were also stronger, with the main IPC market index up 2.7 percent.

“To the extent that German’s release alleviates some tension, that should help the peso,” said Gray Newman, an economist at the Mexico City research office of British brokerage house James Capel. He added that the problems of the peso are a “power-politics” issue, more than just an economic one.

The economic woes included news that inflation was higher than expected, foreign currency reserves had dropped and unions were unwilling to keep wages low.

Supporters of the peace process, including opposition Sen. Heberto Castillo, lauded the release.

“There is a faith that the government can be made to respect the law, and mistakes can be rectified,” he said.