MEXICO CITY -- Fearing an imminent eruption of the Popocatepetl volcano outside this nation's capital, the army and civil defense forces have begun emergency evacuation of 75,000 residents from 16 villages, as President Ernesto Zedillo's government struggled with a series of economic, political -- and now natural -- crises just three weeks into its term.


With hundreds of other troops and riot police moving deeper into the mountains in the southernmost state of Chiapas, where Indian Zapatista rebels took over dozens of villages in a peaceful one-day insurrection Monday, Zedillo was forced to call on the army again in Mexico City: Experts determined that a towering plume of black smoke from Popocatepetl on Wednesday and Thursday could herald a major eruption of the 5,452-meter volcano.


Authorities were on high alert, preparing to implement a sweeping emergency plan for the region after 5,000 tons of ash coated dozens of villages in the state of Puebla, east of the capital, throughout Wednesday night. Mexico's National Center for Disaster Prevention announced that a minor quake followed underground explosions Wednesday that were so intense they melted the snow on the peaks of the mountain known here as Popo.


The blast of smoke and ash followed weeks of intense seismic activity inside Popo, which last erupted in 1947. U.S. and Mexican scientists have expressed increasing concern that the volcano was becoming dangerously active, and environmental groups have sharply criticized the government for failing to prepare nearby residents for evacuation.


The threat of an eruption that could endanger millions of Mexicans came against the backdrop of brewing economic and political disasters that are already testing Zedillo's government. Less than a month into a term that Zedillo vowed would usher in historic change, the 42-year-old economist and his government are defending themselves not merely on natural-disaster preparedness but also on their handling of the Chiapas troubles and an ensuing financial crisis that Zedillo asserts is related.


The Mexican army has been gradually retaking towns occupied by Indian rebels Monday, but they have been hampered by roadblocks and trenches erected by the Zapatistas. The rebels agreed to a cease-fire on Jan. 12 this year, following a surprise New Year's Eve uprising, but peace has been threatened since talks broke down in October.


Zedillo's financial advisers performed radical surgery on the Mexican economy late Wednesday night, allowing the nation's currency to float freely against the U.S. dollar. The currency tumbled nearly 20 percent Thursday, sparking financial turmoil, the specter of inflation, and heavy losses by American investors, who had up to this point considered Mexico the darling of overseas opportunities.


In a speech to economists, the president made an effort to justify the peso's free-fall as economic medicine needed for long-term stability and took pains to explain how the instability in Chiapas and the financial moves are linked.


"There cannot be economic stability if there is no political stability," he said, conceding that his government must redouble efforts to negotiate a peaceful solution to the conflict.


Coming less than a week before Christmas, the series of crises intensified public criticism of Zedillo, who was shown to have 58 percent of popular support in public opinion polls just a week ago. (LAT, AP)