As NAFTA reaches its fifth anniversary, and the launch of the euro puts monetary union in the air, Mexicans are talking about moving ever closer to - the US dollar. Ideas range from pegging the peso to the dollar, to creating a North American currency unit, to simply bidding "adios" to the peso and adopting the greenback. Already, like millions of Russians, many Mexicans keep dollars as a hedge against the peso's infamous instability, reflecting a global trend. Since 1994, more dollars have circulated outside the US than in it, a form of interest-free borrowing for the Treasury that saves US taxpayers over $10 billion a year, according to Federal Reserve specialists. Most analysts doubt Mexico will take a drastic turn in monetary policy soon. But the reasons behind a flurry of discussion about the dollar in Mexico's future are clear. (Canada eyes currency union with US, page 6.) First, Europe's adoption of a single currency has many businesspeople wondering: "If it's good for Europe, why not here?" But a deeper cause is the "peso fatigue" many Mexicans feel after more than two decades of a weak currency that has periodically crashed to wipe out savings and shake confidence in the economy. Mexico's "recurring crises" typically have occurred at the changing of the guard between two six-year presidential terms - as with the peso's last big crash in 1994-95, when the Mexican currency lost 60 percent of its value in relation to the dollar. With President Ernesto Zedillo's term ending in 2000, many Mexicans are already nervous about the peso's stability - and wondering if there isn't a way to break the crisis cycle and give the country a sounder economic footing. The way, some economic players insist, is with the dollar. "The only option for Mexico to have an orderly monetary policy is to fix the currency to a stable value, and the obvious value in our case is the dollar," says Mario Rodarte, assistant director of macroeconomic analysis for the Business Coordinating Council, a Mexico City think tank. "The simplest alternative of all would be to simply let the dollar replace the peso." The idea may sound far-fetched, especially to people who think of Mexicans as a nationalist people who would balk at the idea of carrying around George, Abe, Andrew, and Ben in their wallets. But many analysts say that Mexico's economy is already extensively "dollarized." Some houses are rented or sold in dollars; some products like computers and international airfares are advertised in dollars; and families often quote a dollar price when selling a used car Companies with high import-export volumes do business in dollars, while professionals like lawyers or accountants bill clients in dollar rates. But that dollarization touches only a certain upper crust of society, some observers contend. A recent poll surprised many political analysts when it showed that two-thirds of respondents in the industrial city of Monterrey, and more than half of respondents in Mexico City, were ready to welcome the dollar as their everyday currency. That may be the case with urban Mexicans, says Mariano Morales, an economist at the Monterrey Technological Institute, but such a finding does not mean the majority of Mexicans are ready to lose the peso. "Urban Mexicans are more modern, more aware of the globalizing economy, but I think the average Mexican outside the major cities would take a dim view" of adopting the dollar, he says. Nonsense, responds the Business Council's Mr. Rodarte, citing the $6 billion in remittances from Mexican migrants in the US that every year are sent back to predominantly rural and modest families throughout Mexico. The current dollar debate arose last fall after Rodarte's think tank, which represents powerful business and industrial confederations, again floated the idea as Mexico's best alternative for stabilizing the economy. Then word leaked that government economic authorities were studying the idea along with other options. Monetary specialists say Mexico could follow one of three distinct paths if it chose to officially dollarize its economy: Peg the peso to the dollar, setting a peso-to-dollar equivalency as in Argentina and Singapore; Push for creation of a "North American" currency to be used by the NAFTA countries; Simply allow the dollar to circulate as the country's currency, as Panama and, to a certain extent, Cuba have done. The disadvantage for Mexico would be a loss of monetary autonomy, analysts say, although many economists say economic globalization already greatly limits the Bank of Mexico's maneuvering room. The advantages, according to proponents, would be felt by every Mexican: a sharp fall in interest and inflation rates. Still, not everybody is jumping on the dollar bandwagon. On paper the idea is a good one - but not one that most of the country's small and medium businesses are ready for, says Alfonso Otero Torregosa, executive president of the Industrial Association of Tlalnepantla, Mexico's largest industrial association. "As with NAFTA, this would be something else that would be primarily beneficial to larger companies that are already on a strong footing and ready for the global market," he says. Others worry the idea of adopting the dollar could end up being seen as a panacea for Mexico's economic instability when the root causes are elsewhere. "We have to weed out the corruption that is such a drain, we have to develop a strong and reliable judicial system and a mature political system first," says Alfredo Chvez, a young Mexico City lawyer who has grown up in a world of both pesos and dollars. "Dollarization might have its good points, but not if it distracts us from our biggest challenges." "The current policy has been working quite well over the past year," says Sidney Weintraub, a Mexico specialist at the Center for Strategic and International Studies in Washington. "But if there's another one of these crises like in 1994 then they'll look for something drastic to change the pattern," he says, "and the something could be the dollar."