The Vice-president of the European central bank Vitor Constancio said the EU has much to learn from Latin America which has coped with successive economic and financial crises and has managed to create robust financial structures which have made the region’s system even more resistant to outside shocks.
Constancio and the Bank of Spain governor Luis Maria Linde met in Santiago de Chile over the weekend with their peers from several Latinamerican countries (Peru, Uruguay, Colombia, Mexico and Brazil) as part of an event every two-year to assess the global and regional situations.
“One of the issues we addressed at the meeting was the Euro crisis and possible similarities with some of the difficult periods which Latin American countries have gone through; we have much to learn from that very rich Latin American experience”, said the ECB Vice-president.
“This experience has helped the region set up strong robust financial systems that have enabled it to contain the external shocks”, added Constancio.
The monetary policy of the Euro zone was also addressed because it is essential “to have a framework of believable monetary policy that contributes to the macro-economic stability” of country members and confidence among public opinion and economic agents.
Another issue was the abundant global liquidity and the influxes of capital to Latinamerica, which can exercise pressure on emerging economies of the region and distort stable macro economic balances.
“However the influx of capital to the region has been supported by good macroeconomic policies in Latinamerica and management which have moderated the risks”, admitted Constancio.
Chilean central bank president and host of the meeting Rodrigo Vergara said that the great difference with the European situation and the crises in Latinamerican countries in the past is that “the EU has the advantage of a monetary union”.
“In Latin America we suffered the successive devaluation of our currencies, something which is not possible with the Euro”, underlined the Chilean banker.