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* Bill requires teacher competency exams

* Many teachers favor the reforms

* Teachers’ union leader strongly opposed

By Lizbeth Diaz

MEXICO CITY, Dec 21 (Reuters) – Mexican lawmakers on Friday

approved an education reform bill that aims to rein in the

powerful teachers’ union, which many have blamed for hurting

school quality in Latin America’s second biggest economy.

Lawmakers in the lower house of Congress voted 360 to 51 in

favor of the bill, submitted by President Enrique Pena Nieto

after he took office this month in a move to undercut the power

of the teachers union that had long backed his party.

The reform requires teacher competency exams and merit-based

promotions and chips away at the union’s power to hire teachers

on its own terms.

The education reform is part of a broader pact signed by the

country’s top parties a day after Pena Nieto’s inauguration.

Pena Nieto, 46, returned to power his centrist Institutional

Revolutionary Party, or PRI, after 12 years in the opposition,

promising to push a sweeping reform agenda. No party holds an

outright majority in Congress.

The pact aims to break years of political gridlock and move

forward fiscal and energy reforms to jumpstart the Mexican

economy after decades of sluggish growth.

The education bill, which changes the constitution, must be

approved by a majority of Mexico’s 31 state legislatures.

Mexico’s teachers’ union has more than 1 million members and

is considered Latin America’s biggest union. Its leaders have

for years blocked attempts at education reform while also

influencing the outcome of presidential elections.

Many teachers favor the reforms. Union-controlled jobs can

be passed down through families, and jobs often need to be

bought from the union, teachers interviewed by Reuters said.

But teachers’ union leader Elba Esther Gordillo pledged to

organize opposition. Widely seen as one of Mexico’s most

powerful politicians, she has led the organization since the

late 1980s and her support helped secure former President Felipe

Calderon’s narrow victory over his leftist rival in 2006.

“You do not threaten teachers, you do not tell teachers that

they must comply or you will hurt them,” she said this week.

A former PRI grandee who broke with her old party before the

2006 general election, Gordillo was re-elected in October. Pena

Nieto’s PRI had strong ties with the union during the 71 years

it ruled Mexico before the conservative PAN party ousted it in a

2000 election.

Poor education standards are frequently blamed for holding

back Mexico’s economy. Mexico’s students lag other

industrialized nations, especially in mathematics and science,

according to a 2011 survey by the Organization for Economic

Co-operation and Development.

One educator, who has worked for six years under temporary

contracts without benefits, welcomed the attempt to curb the

union’s power.

“It is all about who you know,” the teacher said, asking not

to be named. “You finish university, you get a masters degree,

you keep up with new studies but if you do not have influence in

the union, the door is shut,” he said.

(Additional reporting by Alexandra Alper and Miguel Gutierrez;

Writing by Michael O’Boyle; Editing by David Gregorio)