ANDRÉS MANUEL LÓPEZ OBRADOR, who became Mexico’s president on December 1st, knows how to put the romance into a honeymoon. On December 13th thousands of people attended a free moonlit screening of “Roma”, a Mexican film tipped for an Oscar, on the heliport of Los Pinos, the residence of Mexico’s presidents until Mr López Obrador took over. The culture ministry supplied popcorn and punch. Mr López Obrador, or AMLO, as he is known, has swapped Los Pinos for more modest digs and opened it up to the public.

Rocio Bonilla, a retired civil servant, watched with her 86-year-old mother, who remembers the first presidential occupant of Los Pinos. Lázaro Cárdenas took office in 1934. “I never thought I’d be allowed to come here,” says Ms Bonilla.

While Mexicans huddled under blankets at the heliport, AMLO was making the sort of decisions that can eventually spoil a honeymoon. The veteran left-wing populist has begun to undo reforms of energy and education, the two landmark achievements of his predecessor, Enrique Peña Nieto. Before the inauguration he spooked the financial markets by saying that he would stop Mexico’s biggest infrastructure project, an international airport for Mexico City. At the same time he is travelling about the country launching others, including a tourist train in southern Mexico and a refinery in his home state of Chiapas.

On December 15th AMLO presented a budget for 2019, giving Mexicans their first idea of the trade-offs he is prepared to make in pursuit of his “fourth transformation” of Mexico, which is supposed to uplift the poor, make the economy more self-sufficient and reduce corruption and crime. The budget shows that AMLO remains a populist, but that he hopes to be a fiscally responsible one.

After the fright he gave the markets by cancelling the airport (in response to a spurious vote badged as a “consultation” of the Mexican people that he held before even taking office), AMLO sought to reassure investors. The finance minister, Carlos Manuel Urzúa, set a target for a primary surplus (ie, before interest payments) of 1% of GDP after an expected 0.8% this year. Although AMLO had suggested that “preventing corruption” would result in massive savings, the budget does not rely on that unrealistic promise. Instead, he had to make some hard choices. At the outset, at least, AMLO is giving a higher priority to economic nationalism and the infrastructure projects that go along with that than to the social-spending side of his programme. 

His plan to give scholarships to young people got a little more than a third of the money he had originally envisaged for it. The budget allocates 100bn pesos ($5bn), about 0.4% of GDP, for a universal pension for old people, 20bn pesos less than originally promised. Most government departments face cuts.

Ambitious plans to overhaul migration policy will get little money. On December 10th Marcelo Ebrard, the foreign minister, announced spending of $5bn a year to discourage migration from Central America to the United States—largely to please President Donald Trump. The money seems to be a repackaging of existing spending in southern Mexico. Mr Ebrard hopes to convince the United States to spend more money in Central America itself to encourage potential migrants to stay home, but there is little sign of that.

Where AMLO does plan to splash out at least somewhat is on his favourite infrastructure projects. On December 16th he attended an indigenous ceremony in which he asked “Mother Earth” for permission to build the “Maya” tourist train. (He seems to think it less urgent to consult environmental officials. The government has yet to publish an environmental impact report on the project and the budget cuts funding for the environment ministry by a third.) AMLO is eager to start work on the refinery. The budget includes 23bn pesos in extra funding for Pemex, the state-owned oil company, to pay for it.

This is part of his expensive scheme to make Mexico self-sufficient in energy, halting Mr Peña’s opening of the sector. Although AMLO’s government has not torn up contracts already agreed with international oil companies, it cancelled the auctions of drilling rights that were scheduled for February. It is unclear what will happen to ambitious plans to build pipelines to increase imports of natural gas from the United States. Pemex, which has a history of inefficiency and corruption, is supposed to raise oil production by 50% during AMLO’s six-year term. His dream of self-sufficiency is “a hermetic view of the energy sector”, says Duncan Wood of the Mexico Institute of the Wilson Centre, a think-tank in Washington.

Congress, which is dominated by AMLO’s Morena party and its allies, is debating measures to scrap Mr Peña’s education reform, which sought to enforce higher standards of teaching in Mexico’s terrible schools.

The costs of reversing Mr Peña’s reforms will become visible only gradually. The government risks wasting billions in AMLO’s attempt to restore to Pemex some of the glory it lost when its monopoly of the oil sector ended. The young will suffer from AMLO’s plans to weaken accountability for teachers.

The attempt to end the $13bn airport is causing immediate problems. Work on the doomed project continues, because the airport trust, a state-owned body, will have to repay $6bn of bonds when it is cancelled. It does not have this money, and the president does not want to burden the budget with that cost. Bondholders rejected an offer by the government to buy back a third of the bonds at a discount, and are unenthusiastic about a second, more generous offer. Until a solution is found, the cranes must continue to operate.

Continued construction of the airport and AMLO’s conservative budget have soothed investors for now. But the calm may not last long. The budget assumes that the economy will grow by 2% next year, but some private-sector economists expect the increase to be smaller. A sharp drop in oil prices would upset the calculations on which the budget is based.

Mexico’s supreme court has suspended a law that cuts the salaries of senior officials (including judges) and will rule in January on whether it violates public employees’ rights. That pay cut will not save the government much money, but it was one of AMLO’s most popular promises. The court could inflict the first big defeat on his young government. If that happens, grab the popcorn.