During the World Cup soccer final, president Martinelli made a statement to the press saying that the "sausage law" would not be repealed, that the unrest was all the fault of union leaders who were "misinforming" the people, that news about an arrest warrant for Juan Jované were just unfounded rumors (but the police DID try to arrest him) and so on. You can see Martinelli on YouTube. Protesters, who had been promised "white smoke" by Papademente, immediately retook the streets.
Under 60 minutes later, the government announced that the controversial articles in the law - about labor rights, police immunity and environmental protection - would be suspended for 60 days and a "dialogue" would be started.
Do we have two governments? It certainly appears that way: One faction of hardcore mobsters headed by Martinelli, and another of those more inclined to negotiating instead of battling it out in the streets, with vice-president Varela (who was in Bocas) as its figurehead. The latter group may enjoy some tacit support from up North, where riots, clouds of teargas and dead people on the shores of the Canal certainly invoke bad memories.
The agreement, however, is just an attempt to gain some time, and widely recognized as such. Some unions say it was negotiated with people who don't represent them. The rounding up of political opponents of Martinelli continues, Juan Jované has reportedly sought refuge in the University of Panama and union leaders like Saul Mendez and Genaro Lopez have gone underground. Unconfirmed reports have it that the road blocks and barricades in Bocas are already up again.
One conclusion that can be drawn by now is that if it comes to street battle, the police loses. One reason is that they lose the battle in the moral sphere when they kill people, and this process goes much faster than in the past. The other is that Gustavo Perez may have been a Noriega loyalist and a war criminal, but as a military commander he doesn't know what he's doing. He moved his elite troops to Bocas, leaving the door wide open for riots to start elsewhere. The police, heavily armed, couldn't hold a bridge against people who were fighting with just sticks and throwing stones. Papadimitriu had to concede to withdrawal of the riot police from Changuinola under pressure of the activists.
The other conclusion is that the protests have further isolated Martinelli, now even within his own governing coalition. With todays sequence of events, they've shown us exactly where to drive the wedge and hammer it.