Euro’s partial or total death seems to be behind the corner. Even if Ben Bernanke, chairman of the Federal Reserve, keeps injecting liquidity or the European Central Bank decides to “rescue” Spain or Greece (the last bailout consisted of 169 billions of dollars), the euro zone faces systemic economic problems that can’t be solved printing money: slow growth, skyrocketing debts, huge fiscal deficits, high unemployment and short competiveness.

The reason why Europe is sunk in this crisis deserves to be fully explained in another article, but when trying to simplify it, we can conclude that some countries entered to the euro zone without making structural fiscal reforms. Originally, this used to be a win-win strategy for both central (Germany, France, Austria and the Netherlands) and peripheral (Greece, Italy, Portugal and Spain) countries: while the first ones exported their products benefiting from the fact that the common currency allowed euro zone’s members to buy them, the second ones not only started to afford these products, but also gain the political and financial support they needed to sustain their spending habits instead.

The excess of optimism and luck of common sense have engendered an economic crisis that can only get worse. Peripheral countries have amplified the amount of their debts, they are less competitive than before and they don’t have the political will to reduce their deficits. This toxic mix increases the probability that they end up defaulting.First of all, because a country that belongs to the euro zone can’t print money to finance its own debt. And the second reason is related with the contagion effect. Even if Spain’s economic situation looks more promising that Greece’s, if Greece defaults, the expectations of a Spain’s default increase. As a consequence, interest rates get higher and expectations to default rise again, entering a death spiral where Spain’s default turns out to be the only way out. But there is also another problem: as banks in central countries like France own part of peripheral’s debt and considering that money can move fast inside the euro zone, the increasing expectations that a country end up defaulting can result in bank runs. And, once again, expectations increase the probability, which increases expectations…. In other words, with or without another bailout, it is just a matter of time until the Euro collapses.

Just as it is impossible to speak about Latin America without mentioning cultural, political, societal and economical differences among Latin American countries, it is also impossible to enumerate the European crisis’s consequences for the region as a whole. However, even though every country will face the end of the common currency in its own way and by its own means, there are two strategies that can benefit them all.

1. Increasing regional integration

If integration is a sought target, pushing for more integration must be the answer when minimizing the European crisis’ impact in the region. Notwithstanding the above, it is convenient that besides reciting regional integration’s benefits, we start our speech by emphasizing the actual and potential costs if we do not change the status quo. For example, instead of saying: “a common Latin American Visa would attract more tourists”, we should be stating that “if we want European tourist to come to the region when being in recession, we must offer them a common Visa”. It is a marginal change in our argument, but may be it is necessary to approach the topic with more compromise and seriousness.

2. Increasing cooperation with emerging countries

In Argentina there isn’t any newspaper that has a correspondent in China or India; they are all based in USA or Europe. I don’t know about universities offering internships to these countries or high schools where Chinese is taught at least as an optional course. Maybe I am wrong, but this situation not very different in the rest of Latin America. This must change not only because BRICS are the “countries of the future”, but due to the simple fact that this future looks far closer.

Deepening regional integration and increasing cooperation with major emerging countries have always been strategic targets for Latin America. But we can use the European crisis as an opportunity to move faster. This can sound ambitious for Latin American current situation; there is no doubt about that. When we read about the “narco war” in Mexico we tend to think that this country has other priorities in before pushing for more cooperation with China or India. In the same way, for Argentinians to learn Chinese at high school, they need to go to high school (Only in Buenos Aires, half of the children that should be attending their classes didn’t start high school or abandoned it).

However, the reasoning should be the opposite: the more social debts a country has, the more it must get closer to the rest of the region and to those emerging giants that have faced the same challenges. Continuing with our example, besides finding news allies to deal with the European crisis, if Argentina follows this way it could learn about the successfully educational program some Hindus have developed in their country and ask for advice to implement it at home. Latin America could also be shocked by a contagion effect, but consisting of an opposite nature.

Having said that, what other plans do you think Latin America could take to increase regional integration and deepen cooperation with emerging markets?