It has been a while since Venezuela began their quest to join Mercosur. Argentina and Uruguay were countries that had their respective Parliaments approving Venezuela`s entrance in the bloc. In the other hand, Paraguay and Brazil remained skeptical about that issue. Hugo Chavez was very skillful in supporting paraguayan president Fernando Lugo during his campaign. The large sum invested in Lugo will payoff as soon as the Paraguayan Parliament approved Venezuela`s entrance in Mercosur.

In Brazil, the situation will be a little different. Last year, Chavez offended the Brazilian Parliament when he accused the parliament of being “linked and a puppet of Washington”. This had serious repercussions in Brazil. Since President Lula does not have a solid majority to approve Venezuela`s entrance, Chavez placed himself in a mess that wont be easily solved. 

First of all, Chavez must apologize to the Brazilian Parliament exactly as he did with King Juan Carlos of Spain. Second, he must use the large personnel he has in Brasilia to restablish some institutional ties with key opinion makers in the press and the parliament. Third, the key decision makers must sympathise with the true apology of Chavez as well as convinced with the benefits that the entrance of Venezuela will bring to the bloc. Finally, but most important, Chavez must send signs to Brasilia that his entrance will affect very little the politics of the bloc. The Brazilian press is very concerned that Chavez will politicize the bloc more than needed, and create an unbalance of power. 

The Brazilian foreign policy should aim in tying up with Argentina to guarantee the balance of power in our favour. If Venezuela becomes a full member and aligns with Argentina to confront Brazil in ay major decision, it will represent another defeat for the Brazilian foreign policy.

To put a brake on inflation rates and prevent the standard of living and economic activity to deteriorate, the Economy and Finance minister, Alí Rodríguez Araque, is drafting guidelines for a new plan along with the country’s central bank. Measures will be taken that affect food, restaurants, public transport and healthcare.

 
According to the minister, it is necessary to restrain demand in industries that are not fundamental for the economy or for the population. Members of the economic cabinet have been saying the same thing for a few weeks now. The objective is to strike a balance between supply and demand.
 

A few proposals have been announced, namely the end of the tax on financial transactions, the provision of funds for the manufacturing industry, subsidies for the production sector and a review of farm debts. In addition, the Finance Commission of the Chamber of Deputies intends to draft new measures to ensure greater efficiency in public expenses, to review liquidity behaviour on a frequent basis and to provide more funds to encourage the production of goods.
 

These measures are a consequence of the 15.1% inflation rate in the first half-year of 2008. It has become necessary to keep prices stable and ensure that the figure does not exceed 19.5% by the end of the year.

Ever since then-president Fernando de La Rúa was forced out of office in 2001, the Unión Cívica Radical (UCR), which opposes the Justicialist (Peronist) Party, has lost considerable terrain. This has caused many of their leaders to join Néstor Kirchner’s movement within the Peronist Party. In view of the country’s economic upturn, few would dare stay in the opposition.
 
However, this trend is now showing a different outline. It started when former UCR deputies and senators - now Kirchner allies - opposed the ‘retention’ tax bill. It reached a peak as vice president Julio Cobos voted against President Cristina Kirchner.
 
Since then, the UCR leader in the Chamber of Deputies, Oscar Aguar, has been saying that politicians who had been expelled from the party for adhering to the government would find open doors should they decide to come back. However, they must resign to any posts in the Casa Rosada. To Aguar, this is the ideal moment to rebuild the party.
 
As it seems, Aguar’s proposal is an indirect invitation for Cobos to go back to the UCR. Because of the popularity Aguar gained during the historical meeting in which his vote defeated the Kirchner couple, the UCR sees in him an alternative to succeed Cristina.

For the third time, the Supreme Court has overruled the writ of prevention filed by Radio Caracas Televisión (RCTV) to resume open-air broadcast. It was interrupted on 27 May 2007 after Hugo Chávez refused to renew the broadcast licence. Nowadays, programming is offered on cable.
 

Chávez made the decision based on the argument that RCTV opposed his government. It came as part of a set of measures aimed at extending his grip on power, but which culminated with his defeat in a vote on constitution reform in late 2007. As the network had high audience rates, the episode represented the beginning of a drop in Chávez’s approval rates.

 
It was the result of a miscalculation on the part of the government. As they controlled the political system and the means of communication, Chávez and his supporters underestimated the ability of public opinion to articulate and change sides. The attempt to enforce profound reforms without a more consistent debate resulted in a split between Chávez’s supporters and opponents.

As he celebrated his second anniversary in office, Peru’s president Alan García promised better income distribution and a fight against inflation. He highlighted his economic achievements, but would not comment on social conflicts and human rights.

 
With approval rates below 30%, he believes that such discontent is related to an increase in the cost of living. Over the past 12 months, inflation has risen by 7%. The main factors behind it include higher food and fuel prices in the global market. As he assessed the current scenario, García focused on favourable economic figures, hinting that he does not intend to shift his agenda.
 

Even faced with pressure to reduce people’s dissatisfaction, the Peruvian president promised to ’severely control price increases as well as public expenses’. In spite of an adverse global scenario, he signalled that international reserves have now reached $35 billion. García also emphasized that risk assessment agencies have awarded the nation investment grade due to responsible management of the economy.
 

He acknowledged problems in healthcare, agriculture and security, but presented no social proposals – just promises. He said that poverty will have seen a 30% drop by the end of his term in 2011.

 
At least in the short run, García will maintain an orthodox economic policy, even if it causes him political damage. Within the government, there is fear that shifting the agenda will not be highly welcomed in the international community and might cause the country to lose the credibility it has earned. In view of this scenario, issues such as state reform will have secondary priority.

57% of Argentines disapprove of Cristina Kirchner’s term in the presidential office. The figure comes from a poll conducted by consultancy firm MBC-Mori and published by newspaper Perfil. In turn, 28% approve of her government. The president has seen her image stained because a row with farmers over a controversial tax bill.
 

Also, half the interviewees consider the country’s economic situation “bad” or “very bad”. Just 21% believe it is “good” or “very good”. In addition, 61% reject the government’s policy to tackle inflation rates, whereas 12% approve of them. The credibility of the National Institute of Statistics and Censuses (INDEC) has been under suspicion because of an alleged manipulation of inflation rates due to pressure from Casa Rosada staff.
 

However, Argentines have favourable expectations when it comes to the performance of the new chief of staff, Sergio Massa. According to a poll by consultancy firm Ibarómetro, published by newspaper Perfil, 53.8% of them are optimistic, whereas 35% have a negative opinion.
 

A different poll conducted by Universidad Abierta Interamericana has also shown poor results for former president Néstor Kirchner. 79.2% of the interviewees said that he should move away from President Cristina. Only 12.1% affirmed that he should accompany her in her term.