MercoPress. South Atlantic News Agency

Non convincing Mr. O'Neill

US Treasury Secretary Paul O'Neill ended a much expected four days confidence building visit to financially fragile Mercosur members with a political display openly contrary to the electoral philosophy of President Bush's administration, --and his own--, which has seen him, in the last weeks, propping government intervention, more corporate regulations and bailing out countries that face financial crisis.

Actually the collapse in Wall Street as a direct consequence of corporate fraud, and deepening investors mistrust reaction, surprised Mr. O'Neill travelling in Africa to learn in situ "about poverty". On his return he had to strongly support strict legislation imposing new regulations including civil and penal responsibilities for corporate board members and CEOs, while trying unsuccessfully to talk the markets into calming.

Preparing for his visit to Brazil, Uruguay and Argentina, Mr. O'Neill gratuitously offended his hosts, and almost aborted the tour, by saying that he's contrary to helping countries out of financial crisis because finally "the money finds its way to Swiss secret accounts".

After apologizing several times through spokespersons and personally, a weakened US Treasury Secretary last Sunday reached Brazil that is holding presidential elections next October, and where jittery markets and a sagging currency have forced the country to appeal to the IMF for additional stand by assistance. Brazil has an outstanding foreign debt of over 250 billions US dollars and some of the presidential candidates seem to have other priorities than compromising on the issue.

Not only did Mr. O'Neill praise the Brazilian economic team but also stressed that South America's largest economy was a good place to invest.

Recalling he had direct responsibility in investing billions of dollars in Brazil, when in the private sector, Mr. O'Neill insisted, "Brazil is a good place to invest".

In Uruguay he spent a few hours confirming and praising the US sponsored 1,5 billion US dollars bail out package, that is intended to save South America's smallest country banking system from a run on deposits. A spill over from the financial and political crisis of neighbouring Argentina, basically a regional "contagion" that multilateral organization, and the US Treasury, denied could occur when Argentina defaulted last January.

"The circumstances of a country have to be evaluated differently rather than saying there is one solution for everyone. Even countries close by, are different", said the US Treasury Secretary in Montevideo next to Uruguayan president Jorge Batlle.

On July 30 Uruguay was forced to shut its banks for four days reopening the following Monday after the US Federal Reserve wired the bridge loan assistance.

Massive withdrawals from depositors since January, speeding up in May, left Uruguay with half its deposits and Central Bank reserves plunged from 3 billion US dollars to just 650 million.

Asked in Montevideo why Uruguay qualified for such a loan and neighbors as Argentina did not, Mr. O'Neill replied "Because Uruguay is a country that has followed very sound economic policies".

In Argentina, Mr. O'Neill met with President Eduardo Duhalde for 35 minutes and the encounter was described as "cordial". President Duhalde urged Mr. O'Neill for fresh funds but the US financial chief kept to the official line saying "technical advice" was available and that the US was "glad to work through the international financial institutions to support nations that support sustainable growth-creating policies".

"The US government more than anybody else wants to see Argentine people overcome this critical situation, and we hope an agreement with the IMF can be completed very quickly", said Mr. O'Neill.

As the Argentine Government House spokesman mentioned just before the Buenos Aires visit, "Mr. O'Neill is no Father Christmas".

Mr. O'Neill ended his South American tour in another hot spot, Colombia, where he represented President Bush in the inauguration ceremony of incoming president Alvaro Uribe, who has pledged an "aggressive" policy, --with US military funds--, to end with the neo Marxist oriented and drug money financed guerrilla movement after five years of frustrating and inconclusive peace and disarmament negotiations with the previous government.

Whatever the "confidence building" consequences of US Treasury Secretary's visit, and in spite of President Bush's recent support, rumors in Washington insist "Father Christmas O'Neill" might not be around for December.

Sharp tongued Mr. O'Neill is a strong candidate to be replaced after the coming US November mid term elections when a cabinet reshuffle could take place.