The Finance and Economy ministers from Argentina, Brazil, Bolivia, Ecuador, Paraguay and Venezuela decided Thursday, May 3, in Quito the creation in parallel of a development bank and a macroeconomic stabilization fund to support financially the region. The initiative was agreed during the ministerial meeting in Ecuador's capital.

The six South American countries will give priority to the creation of a development bank and the strengthening of the Latinamerican Fund of Reserves, FLAR, which already exists and works in the framework of the Andean Community and with the purpose of helping country members address macro fiscal situations.

The agreement marks a significant distance from the original proposal from Venezuela's Hugo Chavez of creating an only entity under the name of Bank of the South.

"The project as has now been drafted will enable to solve several geopolitical issues that have been blocking integration," according to sources from the Ecuadorian Central Bank hosting the meeting.

The new organizations are scheduled to be made official sometime next June 22/26 when the presidents of the country members will be signing the creation of the new financial institutions, said Ricardo Patińo, Ecuador's Finance minister.

A second stage of the project is the implementation of a common currency, probably at Central Bank level basically for trade and capital movement compensations.

Quito press sources said that the two dates and places under consideration for the launching are Caracas when the opening of the football Americas' Cup or in Paraguay during the Mercosur presidential summit.

Mercopress

Comments (2)

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To:Ch.c
written by João da Silva, 2007-05-04 23:42:42

Your turn again,to comment.Sort of wierd,dont you think so?

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written by AES, 2007-05-05 04:37:51

And the new currency is backed by oil? Now that Brazil is achieving economic stability, Why is it jeopardizing this success with a new euro. Unless the currency i s backed by gold reserves, it is a curious idea. And we were doing so well. The old saw, if it aint broke dont fix it. Fix Brazil first, the poor, the infrastructure, then help your neighbors. Ith concept is probably noble, but overreaching and self debilitating to the economy of Brazil. And a united army to enforce the will of the continent. Chavez has a stash of new arms, perhaps he would be willing to police the concept, no doubt.

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