Political tensions in Nicaragua between the president, Enrique Bolanos, and Sandinista leader and former president Daniel Ortega, are seen as a threat to the country’s democracy.

In the last days, the Sandinista-majority National Assembly has cut back the powers of four ministers and two vice presidents. Also, Sandinistas have threatened to lift President Bolanos’ immunity from prosecution for misuse of state funds.

The crisis has cross border implications. The US has warned that Nicaragua could be removed from CAFTA (the Central American Free Trade Agreement) for its lack of democratic stability.
But on Thursday, Bolanos and Ortega agreed to postpone controversial constitutional reforms, easing a political crisis.

Bolanos said after a six-hour meeting on Monday night with Ortega, that the reforms would take effect in January 2007, after he finished his five-year presidential term.
Ortega, who is favoured to win the elections in late 2006, now controls the judicial and legislative branches of Nicaragua's government. He is one of many popular left wing candidates in the wider region – Lopez Obrador in Mexico, Evo Morales in Bolivia. There is a growing trend of Latin American nations electing leftist presidents critical of Washington, such as Chavez in Venezuela and Lula in Brazil.