Finance Minister Pedro Malan insisted yesterday on the need for a "more profound constructive engagement" on the part of multilateral institutions and governments in helping Argentina. According to Malan, another approach is necessary in this period of transition of the Argentine crisis. He suggests the definition of a series of priorities. "The priority now is to unshackle the credit system, for there is no modern economy that can function without credit. Credit needs banks, a functioning payment system. This priority is urgent right now," he told participants in the seminar on "The Euro and Brazil," organized by this newspaper. 
	
	
 Malan criticizes the stance taken by multilateral institutions like the IMF, who are asking for reforms in Argentina before the country can receive financial help. 
	
	
 Given the degree of uncertainty that prevails over the inflation, foreign exchange and interest rates and over the economy's real Gross Domestic Product (GDP) this year, the approach should not be the traditional one, the Finance Minister says. 
	
	
 Pedro Malan's attitude in relation to Argentina is very different from that of Jaime Caruana, governor of the Bank of Spain, the Spanish central bank. To Caruana, Argentina has to "create a broad program that generates internal and external stability and discuss it with the IMF." 
	
	
 The Bank of Spain Governor did not want to detail what points Argentina should deal with to expand its program. 
	
	
 Spain is one of the leading investors in Argentina, whose instability had a big impact on the results of Spanish banks in 2001. But Caruana said that the banks "did their homework" and made provisions for their investments in Argentina. 
	
	
 Malan noted that as part of the constructive engagement in relation to Argentina, a group of experts spent the day with authorities from that country, recounting their experiences in situations like the one the Argentines are facing. In the group were former Bank of Mexico Governor Miguel Mancera, who dealt with the peso crisis in 1995; a former Chilean Central Bank president who faced the 1982 crisis, when the Chilean GDP dropped by 14 percent; former IMF Fiscal Affairs Director Vito Tanzi; an expert in restructuring the Spanish debt; and former Brazilian Central Bank President Gustavo Loyola, who lived through the time of the Collor government's withholdings and of the Proer [Program to Encourage the Reorganization and Strengthening of the National Financial System] - the program to restructure the Brazilian banking system. In Argentina's defense, Malan says that Brazil's Mercosur partner "has sought to define with clarity the fundamental issues of its basic regimes - foreign exchange (floating exchange rate regime), monetary (they intend, after phase of transition, to define their inflation goal system, which was important to Spain from 1995-1998) and fiscal." This, the Minister insists, is why "it makes no sense to demand that everything be done in one or two weeks," referring to what the IMF and some governments, like that of the United States, are asking. 
	
	
 Malan defends a single currency for Mercosur. "We want to keep alight the flame of a single currency in the region in future, even if a distant one," but until then, "there is the job of consolidating the institutions in the political and institutional sphere, of productive restructuring and of modernizing the State" in six countries - Brazil, Argentina, Uruguay, Paraguay, Chile and Bolivia. 
	
	
 The Minister says he is radically opposed to the idea of dollarizing the Brazilian economy. "We do not want to yield on Brazil's having its own currency, its regional currency. Dollarization is a not very trivial process of negotiation with the country that issues the currency, in this case the dollar, involving complex questions about the role of ultimate lender, the role of the Federal Reserve in the supervision and regulation of the banks in the dollarized country." According to Malan, the dollarization process is irreversible. 
	
	
 The Minister believes that tension between Brazil and Argentina, resulting from the floating of the real in 1999, will tend to disappear because the neighboring country is opting for a floating exchange rate system. Malan predicts that Argentina will be more competitive when it emerges from the crisis. "A little calm is needed, the ability to look ahead, not let oneself be carried by the difficulties of the moment," he emphasizes. 
	
	
 According to the Minister, Mercosur managed, after an "enormous technical effort,' something that did not exist in the region two years ago - the harmonization of the statistics of the member countries, Bolivia and Chile, which were not comparable before. 
	
	
 "Today we have comparable statistics; there is a macroeconomic monitoring group in the Finance Ministry and experts from the six countries' central banks who meet regularly. Based on this effort of statistical harmonization, we announced, in December 2000, an agreement for basic convergence parameters. The presidents of the six countries endorsed certain goals in relation to the debt, GDP, nominal deficits as a proportion of the six countries' GDPs, and maximum inflation. Whoever says that these are small steps is incapable of recognizing the European Union's experience," the Minister says. According to Malan, "long marches start with first steps." 
	
	
 This was an important step that President Fernando Henrique Cardoso called a little Maastricht, that is, the search for convergence parameters that serve as a reference point for talks between experts from the six countries, the Minister says. 
	
	
 To Malan, however, more important than the harmonization of the parameters and the little Maastricht is the search for convergence of policies in a broader sense - structural, macro and microeconomic ones. The Finance Minister says he hopes, for Mercosur, something similar to what happened in the EU: "an ability to look decades ahead and not let oneself get beaten down, like in some countries that dedicate themselves to lamenting, that see the difficulties as being insurmountable, and the problems as being unsolvable." Malan defends a different posture: "to set aside the notion of cynicism, skepticism, that things will not work out," and believe, like the Europeans, that there is a future to be built by the Mercosur countries and Chile and Bolivia, the associate members. 
	
	
 The Minister says that after the October elections in Brazil, it will be necessary to make more progress in the process of making changes to which the country has been committed over the past years.