MACROECONOMIC POLICIES AND FINANCIAL INTEGRATION

 

The Andean Community countries are working jointly to harmonize their macroeconomic policies, particularly their exchange, financial and fiscal policies. The CAN Advisory Council of Treasury or Finance Ministers, Central Bank Presidents and Economic Planning Officers has progressed in defining the criteria for convergence on inflation, public debt and fiscal deficit.

 
 
CONVERGENCE MACROECONOMIC
Important steps have been taken toward macroeconomic convergence, above all since the creation of the Andean Community Advisory Council of Treasury or Finance Ministers, Central Bank Presidents and Economic Planning Officers.

Those steps are:
   
The adoption in May 1999 of the first criterion for inflation convergence, consisting of the gradual attainment of single-digit annual rates.
   
The definition in June 2000 of a follow-up mechanism for the first convergence criterion through the presentation of biannual reports.
   
The adoption in June 2001 of a second criterion on fiscal convergence (that the non-financial public sector deficit will not exceed 3% of GDP as of 2002).
   
The formalization in June 2001 of the formation of the Permanent Technical Group (PTG) whose main purpose is to follow-up on the inflation and fiscal convergence targets.
   
The approval in April 2003 of Decision 543 that commits the countries to submit their Convergence Action Programs (CAPs) to the Secretariat every year.
   
The instruction of the Permanent Technical Group by the Advisory Council in June 2003, to evaluate a proposal to revise the current inflation convergence target, in order to reduce the level and volatility of inflation and moderate its dispersion among the Member Countries.
   
The approval in May 2004, through Decision 578, of the Regime to avoid Double Taxation and Prevent Tax Evasion. In July of that same year, an agreement was reached, through Decisions 599 and 600, on the Harmonization of Substantive and Procedural Aspects of Value-Added type Taxes and the Harmonization of Indirect Taxes, respectively.
   
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FISCAL / TAX HARMONIZATION
   
Harmonization of Indirect Taxes
   
Double Taxation
   
Fiscal Equity
   
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FINANCIAL INTEGRATION
   
Free Trade in Financial Services
   
Harmonization of Prudential Criteria
   
Integration of Stock Exchanges
   
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CAN economic authorities plan to boost microfinance in order to shield grassroots economies from the crisis
Lima, February 2, 2009
Declaration of the Council of Treasury or Finance Ministers, Central Banks and Heads of Economic Planning
Lima, February 2, 2009
CAN Ministers of Economy and Finance coordinate
measures to jointly deal with the international crisis

Lima, November 24, 2008
Declaration of the Advisory Council of Treasury or Finance Ministers, Central Banks and Heads of Economic Planning
Lima, November 24, 2008
Wagner proposes the South Americanization of the CAN’s financial institutions and macroeconomic policy harmonization
Lima, June 22, 2005
Economic Report
Macroeconomic Convergence Process in the Andean Community
June, 2001
Final Report of the Fifth Regular Meeting of the Andean Community Advisory Council of Treasury or Finance Ministers, Central Banks, and Economic Planning Officers
Caracas, June 21, 2001
Andean Integration and dollarization: Some reflections about Ecuador’s case
Presentation by the Chairman of the Board of Directors of the Central Bank of Ecuador, José Luis Ycaza, at the seminar "Ecuador’s dollarization and its effects on Andean subregional trade"
Lima, August 25, 2000
Latin American dollarization processes
Presentation by Dr. Liliana Rojas-Suárez, Director of the Deutsche Bank Securities of New York, at the seminar "Ecuador’s dollarization and its effects on Andean subregional trade "
Lima, August 25, 2000
Dollarization no obstacle to the formation of the Andean Common Market, according to Ecuador
Lima, August 25, 2000
Report of the Fourth Regular Meeting of the Advisory Council of Treasury or Finance Ministers, Central Banks, and Economic Planning Officers
Lima, June 8, 2000