Common currency, credit, and passport for SICA countries?

Following their lackluster meeting to respond to the financial crisis in October, the presidents of Central America came together yesterday and agreed to a 41 point plan including several major stimulus and stabilization plans.

Among them are agreements in principle for common passports allowing freer traffic between the member countries (4 countries have already signed on to this), a credit fund accessible to member governments, and perhaps most notably, a common currency (El Salvador and Panama are currently dollarized, while the other 6 SICA countries use their own currencies; no agreement was made as to what currency would be adopted, or if a new one altogether would be instituted).

Details on each of these have yet to be laid out, and while the proverbial devil will inevitably be found therein, these agreements should be seen as potentially major shifts in moving towards regional financial integration. While international press coverage has been slim so far, I expect the development (if it happens) to become major news in the coming weeks, and for the comparisons to the EU will abound (if not only by the EU countries themselves, with whom the Central Americans just signed a separate agreement, making the EU the largest development aid donor to the sub-region).

In other news to come out of the meeting, Daniel Ortega assumed the SICA presidency for a 6 month term. In his acceptance speech, the Nicaraguan president didn't miss the chance to stick to the world's capitalists, declaring "Nos vendieron un modelo, nos impusieron un modelo, y ese modelo nos tenía y nos tiene amarrado de manos de pies, y nos ha tenido amordazado," and adding "Hoy más que nunca tenemos que unirnos."


Sources: SICA, Univision, El Nuevo Diario, AFP, Deutcshe-Welle