1989 election In 1989 he ran for the presidency for his faction,
Herrerismo, with
Gonzalo Aguirre as his running-mate. In the
1989 general election, governed by the
Ley de Lemas system, Lacalle received the most votes of any presidential candidate, while his party was the most voted political group. Under the Ley de Lemas system, the highest finishing candidate of the most-voted party was elected president. He took office on 1 March 1990 for a five-year term. He formed a coalition with some factions of the
Colorado Party, called
Coincidencia Nacional ().
Tenure Upon taking office, Lacalle sent parliament a tax reform bill which was immediately passed with the support of the Colorado Party.
Sales tax were increased from 21% to 22%
income tax was increased and a few other taxes were created. During his rule, he encouraged a free market program, participated in the
Brady bonds plan to alleviate foreign debt obligations, and was a co-founder of the
Mercosur, along with the presidents of
Paraguay,
Brazil, and
Argentina, which came into effect with the
Treaty of Asunción in 1991. In 1992, support for his economic reforms suffered a heavy blow when one of his most significant initiatives, a plan to privatize Uruguay's state-owned companies, was rejected by
referendum. In the
1994 national elections, he selected his Interior Minister,
Juan Andrés Ramírez to be the presidential candidate of the Herrerismo faction. The National Party narrowly lost the elections to the Colorado Party. Among several prominent politicians who took part in his government are
Héctor Gros Espiell,
Sergio Abreu,
Juan Andrés Ramírez,
Carlos Cat and
Ignacio de Posadas. ==Later runs for the presidency==