MercoPress. South Atlantic News Agency

South America News.

Fifth Mercosur-Europe round

The European Commission and Mercosur began this week in Montevideo and Santiago the fifth round of bilateral talks which should help prepare the agenda for the Latinamerica-Europe summit to be held in Madrid next May 2002. According to reports from Brussels the European delegation has a set of concrete proposals on tariffs and services, together with agriculture the most irritating areas of the negotiations that however are considered "a priority for Europe". "The fifth round will be a milestone for both sides, given the strategic importance of the areas under discussion", said Brussels sources, although there was no anticipation of the contents of the European proposal. However it is believed the European delegation will make additional presentations concerning goods and services trade, government purchases and specific decisions to encourage and facilitate bilateral trade operations. Guy Legràs, Foreign Affairs Director of the Community, heads the European delegation. The first leg of the talks will be in Montevideo until July 7th., the second in Santiago until July 12th.

Lower expectations

Argentina and Brazil, Mercosur' main partners have lowered their 2001 economic targets following complications both internally and in the world scenario. Argentina has cut its estimated annual growth from 2,5 to 2,2% given persistent doubts in world markets about Finance Minister Domingo Cavallo's bold measures to reactivate the country's economy, in recession for the last three years. However one indicator that will worsen before it begins to improve is unemployment, currently at 15%, and expected to jump to 17%. This figure does not include the under-employed which could be another 25/30%, giving an idea of the magnitude of the Argentine situation and social unrest with recent outburst of violence. Brazil has also become modest: annual growth has drastically dropped from 4,5% to a still considered generous 2,8%, while inflation is expected to creep a couple of points above target, reaching 6%. Next year's presidential election and the anticipated political activity, plus the energy crisis have turned Mr. Fernando Cardoso into a lam