MercoPress. South Atlantic News Agency

Lugo complains restrictions on market access and in energy integration

President Lugo and his dilemmas

Paraguayan president Fernando Lugo called for the free flow and free access of his country’s goods to Mercosur senior members’ markets and insisted on the energy integration of the block.

Lugo also pointed out that the incorporation of Venezuela and Ecuador as full members of Mercosur would be very positive for the group, but it must be done “under the consensus umbrella as determined by the Mercosur charter and the Paraguayan constitution”.

“The Paraguayan government is making all efforts possible for Venezuela and Ecuador, and other countries, to join Mercosur, but we respect institutions”, said Lugo.

The Paraguayan president was addressing the Mercosur summit in Montevideo but was very careful not to openly support Uruguayan president Jose Mujica initiative to circumvent the stumbling block of the Paraguayan Senate that refuses to vote in support of Venezuela.

Lugo who has insufficient congressional support and has been unable to convince the Senate to vote for Venezuela, was warned by lawmakers he could face impeachment if he backed any plan that would elude or ignore the “Paraguayan legislative sovereignty”.

“We are convinced that the incorporation of Ecuador and Venezuela will reinforce Mercosur”, he added.

The Paraguayan Senate is the last hurdle for Venezuela since all three other full members Legislatives (Argentina, Brazil and Uruguay) have approved the incorporation of the country ruled by President Chavez.

Precisely that is the main objection from the Paraguayan Senate: “we support Venezuela’s entry but not that of President Chavez” who threatens “democratic governance in the country”.

On Tuesday morning Presidents Mujica and Lugo had a long two-hours discussion when it is believed the Uruguayan leader tried to convince his Paraguay counterpart to accept a mechanism for Venezuela’s full membership access, avoiding the hurdle of the Paraguayan Senate.

Lugo emphasized on the need for trade and energy integration.

“For Paraguay it is crucial to increase trade and for Mercosur to guarantee the free flow of goods and the free access to the Brazilian and Argentine markets as contemplated in the Mercosur charter”, said Lugo.

He added Paraguay strongly favours energy integration.

“We want a energy integration with a solidarity spirit. Paraguay generates almost ten times more power than it consumes, most of which is absorbed by Brazil and Argentina at rock bottom prices, based on only-buyer contracts dating back decades.

Paraguay recently received the green light from Mercosur to sell power to Uruguay. However since the country is landlocked it needs the Argentine grid to reach Uruguayan territory. For this the Argentines are demanding a huge cross territory toll plus a limit to the energy transported.

So far and in spite of the alleged consensus for such an operation no power has reached Uruguay from Paraguay.