Ever since the Argentine economy slid into crisis last year, there have been fears that the difficulties would ripple across the region. Uruguay's recent troubles are proof that Latin American markets are so deeply intertwined that any national emergency poses a threat to its neighbors. The chief concern has always been Brazil, South America's biggest economy. A crisis there would be a body blow to the entire regional economy -- and since the start of the year, Brazil's prospects have plunged. Fortunately, the International Monetary Fund stepped in last week with a $30 billion loan that could halt the slide. But the IMF package is only a safety net; Brazil must take charge of its sickening finances. Other concerned nations must help out as they can -- and they can do more than they think.

The symptoms of Brazil's illness are plain. Since January, the real, the country's currency, has lost about 50 percent of its value -- nearly one-third in the last month alone -- and the economy has stopped in its tracks. Total debt has reached 60 percent of gross domestic product, a rise of 8 percentage points in a year. The slowdown in the international economy has increased investor reluctance to finance government borrowing. With about one-third of the public debt indexed to the dollar, the fall in the value of the real compounds the concern.

The irony is that Brazil has been relatively well behaved. Since 1999, when debt began to spiral out of control, the government has met IMF spending targets; it has a primary public sector surplus that exceeds 3.5 percent of GDP; there is a flexible exchange rate; and the central bank has an inflation-targeting policy. The big change, apart from the global slowdown, is the political outlook.