Guatemala Relaxes Hard Economic Line

Gen. Oscar Humberto Mejia Victores, the nation’s chief of state, fired his finance minister today and announced that he is rolling back tough new economic measures that had triggered widespread protests and prompted rumors of an imminent coup.

“The suspension of the new laws was done to avoid a greater conflict and not affect the majority of Guatemalans,” he told a news conference.

He also announced that he fired Finance Minister Leonardo Figueroa Villate, who had held the post for three years.

Thousands of panicky shoppers had stocked up on food and gasoline after the military government pledged that it would carry out a new austerity program, and rumors of a government crisis swept the country.

Tax Measures

Mejia Victores had said on national radio and television Thursday that he would not back down on enforcing the new measures, which raised taxes on imports and imposed new taxes on most domestic products.

He also said he was canceling a trip to the Vatican, Israel and Egypt, scheduled to begin Sunday. The surprise cancellation appeared to acknowledge public discontent with his economic policies.

Mejia Victores, who assumed power in a March, 1983, coup that overthrew Gen. Efrain Rios Montt, had said he wanted to leave a “consolidated economy” to the next government, which is to be elected Oct. 27 and take office Jan. 14.