The IMF's rescue package for Brazil

Brazil and the International Monetary Fund hammered out an agreement for the former to provide more than $41 billion in aid to stabilize this region's largest economy.

But Brazil is not out of the woods yet.

Firstly, delivery of the funds will depend on Brazil's fulfillment of economic reform pledges and all too many of these measures will have to pass through Congress -- a long and precarious process.

Secondly, Brazil's austerity plan quite possibly misreads the problem, which is not so much the size of the budget, or even the debt, as the astronomic interest rates and tax evasion which deprive Brazil of any serious revenue base.

The biggest point in Brazil's favor remains Friday's package -- both because it may stabilize expectations sufficiently to bring down interest rates and because it shows that the U.S. cannot afford to let the biggest country in its Latin American backyard go down the drain.

Thus while there have been signs of recovery and even euphoria on some financial markets, the overall evidence is that there are no grounds for any premature optimism which might produce a new bubble to burst.

-- The Buenos Aires Herald, Buenos Aires