This period of government was impacted by a series of crises and controversies, including the 2002 economic crisis and the livestock foot-and-mouth disease epidemic that led to the loss of international markets, but also featured progresses on human rights after for the first time since the return of democracy began the investigations of the crimes performed during the 1973-1985 civic-military dictatorship and the establishment of the Frame Law of Environment.

During his speech, he pledged to create a relief package to the agriculture sector, in economic matters promised an adjustment plan, and regarding human rights expressed his intention to start investigations to find out the location of forcibly disappeared Uruguayan people during the 1973-1985 dictatorship.

The president of National Party Luis Alberto Lacalle even dared to say that Nationalists were responsible of allowing Batlle being elected and if it was possible to go backwards he would change his votes.

[6][7] The law not only foresaw general aspects but also included special provisions related to the ozone layer, climate change, chemical substances, trash and biosecurity.

[6] Among them, it banned the emissions of substances or energies that put the human, biodiversity or environmental health into risk, in violation of the regulations on environment limits established by the authorities.

Another controversial aspect was the obligation of the Ministry to send copies of the yearly report to the General Assembly and to non governmental organizations that, according to Bergstein, in the first case it was not appropriate and in the latter was not clear if it had to be sent to some or every NGO.

Due to the loss of markets, thousands of slaughterhouses' workers went to unemployment insurance and there were financial issues with the payment chain of livestock industry.

[10] President Batlle in resolution 858/000 of 9 August 2000 ordered the creation of the Commission for the Peace, a public research body on human rights matters, part of the Presidential Office, with the goal of finding out the location of the victims of forced disappearances during the civic-military dictatorship of 1973–1985, as well as the location of the minors disappeared during that regime, in order to give a closure to the situation and reach peace among Uruguayans.

To fulfil this goal, the commission was granted powers to receive, classify, collect and analyze information about forced disappearances occurred during the dictatorship, and after the end of the research it should write and publish a final report with conclusions about the denunciations of forced disappearances it received and if considered appropriate to suggest legal measures or reparations to take.

[11][12] The Commission raised its report on 10 April 2003 to the Executive,[13] which accepted it completely as the official version of what happened to the forcibly disappeared persons during the dictatorship.

[15][12] Part of the report was publicly questioned, among other reasons, because of the reference of 24 cases of disappearances since 1973 whose remains would have been exhumed at the end of 1984, cremated and thrown at the River Plate, but this claim was later proved to be wrong.

[12] The Commission for the Peace at the end decisively contributed to destigmatize the human rights topic on the public agenda, and rather than giving a "closure" the issue of human rights violations during the dictatorship as Batlle intended, it instead set the basis to establish itself into the political and mediatical agenda of its time, as well as to help including all social and political sectors to the commission.

[12] On 31 March president Batlle announced after a research the granddaughter of Argentine poet Juan Gelman was found, that she was kidnapped after birth during the dictatorship period.

However, a specific feature of his economically liberal ideology was on to expand reductions to taxes of employer payments for social welfare of workers of certain groups such as the agricultural, industry and transport, besides of to exempt from Property Tax (IP) to the agricultural market, with the reasoning of boosting the economic activity of the companies and thus creating more employment positions.

At the International Conference on Financing for Development in Monterrey, Batlle said about Cuba that "it has been using the same economic theories for 44 years by which is, notoriously, going through a hard time", and later, he condemned the situation of the human rights in that country, in addition to say that it was not a democracy.

In April of that year, Cuba's foreign minister Felipe Pérez Roque branded Uruguay as "kneeling and servile", saying that the country had exchanged its vote at the UN for meat sales.

At that time, the Uruguayan authorities began working on a resolution draft on the situation of human rights in Cuba and to allow the entry of international observers to the island.

These controversial statements were expressed during the talk Batlle was having with Boerr after the end of the interview he was performing, that due to their nature, was not intended to be recorded.

How could I suggest Duhalde anything?The recording quickly was viralized and soon there were repercussions in public sphere of Argentina and criticism from the political parties in opposition in Uruguay.

Batlle then gave a press conference in Liberty Building where he told his reasons and the next day he travelled to Quinta de Olivos in Buenos Aires to meet Duhalde.

During this public meeting Batlle repeatedly apologized for what he said, claiming that their comments were made because he was "driven crazy" and angered during a time when Uruguay was at the edge of falling into a crisis, and ended his speech visibly touched.

[26] The approval rating of Batlle's presidency then steadily declined by February 2002, with a strong fall in June 2002 during the worst of the economic crisis, ending 2002 with a score of 15%.

[26] By 2004 approval rating began to decline again, falling 4% and with increase of disapproval, what could be explained due to the elections' campaigns occurring that time.

During the most intense period of campaigning the approval rating reached 5%, partly because the Colorado Party by then had lost a substantial part of its voters, and also because of the opposition' discourses, by National and Frente Amplio candidates, as well as the population opinion was to attribute the government as the responsible of the 2002 economic crisis, but attribute the following economic recovery as caused by external factors.