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Last Updated: Monday, 4 December 2006, 11:49 GMT
Mexican president takes pay cut
Mexican President Felipe Calderon waves after being sworn in.
Felipe Calderon said the cuts would save billions of dollars
Mexico's new president has announced a 10% pay cut for himself, his cabinet and high-ranking government officials as part of an austerity package.

Felipe Calderon also promised to cut government spending in a range of areas, from foreign trips to mobile phone expenses.

He said the savings, which would amount to the budget of six ministries, would be spent on social programmes.

Mr Calderon also promised to increase disclosures to avoid corruption.

'New schools'

"We will account for every peso the citizens have given to the government. Transparency and accountability is the responsibility of every democratic government," Mr Calderon said in a TV speech,

The president said the cuts would save about $2.5bn in the next year which would be enough to build 2,500 schools.

The armed forces, however, will not be hit by the austerity drive.

Mr Calderon said he would substantially raise the wages of the armed forces, calling them a crucial weapon against heavily-armed drug gangs.

Last year, former President, Vicente Fox, was paid a salary of $245,000. The head of state's salary for 2006 has not yet been disclosed.

Mr Calderon was sworn in as Mexico's president on Friday.

He beat his nearest rival, Andres Manuel Lopez Obrador, by half a percentage point in a keenly-fought election in July.

Mr Lopez Obrador had promised to slash government salaries of Mexico's officials and improve the lives of 50 million Mexicans living in poverty, if voted to power.

Mexico has seen months of protests by supporters of Mr Lopez Obrador who say the poll was rigged - something the courts have rejected.

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