Commentary: What A `Euro' Could Do For The Latins

While the world focuses on the euro's imminent launch, South Americans are quietly laying the foundation for a common currency of their own. At a regional summit in June, Argentine President Carlos Menem will renew his call for a single monetary unit for Mercosur, the customs union made up of Brazil, Argentina, Uruguay, and Paraguay. When Menem first raised the idea last December, pundits dismissed it as folly. But they're wrong. Anticipation of the benefits of the euro is already yielding Europe a bonanza in the form of corporate restructurings, lower interest rates, and booming stock markets. In the same fashion, a single Mercosur currency--perhaps called the "merco"--could bring economic stability to the region by opening borders and improving trade. Even the Brazilians, whose participation is key, are discussing the possibility. For one thing, adoption of the merco could pressure their procrastinating Congress to cut budget deficits and reduce debt.

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