Description

The objective of this paper is to develop an approximation to the issue of cooperation and coordination in the macroeconomic management and in the integration of financial services in Mercosur. The costs and benefits of a macroeconomic coordination and cooperation framework, such as a monetary union in Mercosur, is presented. The macroeconomic performance in the Mercosur area is evaluated using the Maastricht convergence criteria. This paper shows that, even though there have been achievements in inflation and fiscal discipline, many countries don’t reach the convergence criteria established for exchange rate and interest rate. Neither, the general economic conditions needed for an optimal currency area are met. This work also analyzes the financial regulation principles that these countries need to share to move forward towards financial integration. We conclude, that in the near future, it seems impossible to achieve full coordination neither in macroeconomic policy nor complete harmonization in financial regulation. Nonetheless, the paper suggests principles and concrete actions that could contribute to the advance in these areas.