Source Pravda.Ru

Tango effect shakes Mercosur

Aggravation of the financial situation in Brazil and Uruguay

The Argentine crisis started showing its effects among other countries of the region and today, Brazil, Uruguay and Paraguay are facing extreme difficulties to stabilize their economies. The current scenario in Mercosur, the third largest free – trade agreement worldwide, makes the situation unpredictable for Latin America in the short – term.

On Thursday, Uruguay eliminated restrictions on the US Dollar value and in only two hours, it climbed up a 30%. Northwards, Brazilian country risk reached 1511 basic points and it is now the world highest after Argentina. Furthermore, Paraguayan authorities also informed the Estate is facing a total collapse as a result of the lack of funds to afford its public foreign debt.

Consequently, Washington is reviewing IMF hard policy towards the region, whose authorities remain reluctant to concrete financial aid to stabilize the situation. The US State department is afraid the aggravation of the social crisis may lead to left wing Governments in the near future in two of the largest economies of Latin America: Brazil and Argentina.

As for the first one, the day to day financial extortion headed by the IMF and the foreign banks not only do not stop the rising of the Workers Party leader, Lula Da Silva in the pools, but also encourage the public opinion on his favour. Argentina, in turn, shows a day to day advance of the left wing parties towards the run for Presidency next year to the extreme that a former leader of the Trotskyism, Luнs Zamora is at the head of the pools.

Hernan Etchaleco PRAVDA.Ru Argentina

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