Brazil and Argentina to discuss common currency
ARGENTINA BRAZIL
In a joint piece they wrote, Brazilian President Luiz Inacio Lula da Silva and Argentine President Alberto Fernandez stated that Brazil and Argentina wanted to integrate their economies more, even by creating a unified currency.
The paragraph that was posted on the Argentine website Perfil reads, "We seek to remove the obstacles to our exchanges, simplify and modernize the procedures and stimulate the use of local currencies."
According to the report, "We also decided to forward discussions on a common currency for South America that can be used for both financial and commercial flows, cutting expenses of operations and our external vulnerability."
The concept of a single currency was first broached in an article written last year by Fernando Haddad and Gabriel Galipolo, who are currently the finance minister and executive secretary of Brazil, respectively. Lula made reference to the proposal when running for office.
Following the custom of first visiting Brazil's biggest trading partner in the region, Lula chose Argentina for his first international trip after taking office. After four years of difficult ties, the previous right-wing president of Brazil, Jair Bolsonaro, left office.
As a result of Bolsonaro's decision to withdraw from the regional organization owing to the inclusion of Cuba and Venezuela, Brazil departed CELAC in 2019. Lula's visit to Argentina's neighbor also signals Brazil's return to the organization.
According to the article, both presidents stressed the importance of excellent relations between Argentina and Brazil to deepen regional integration.
The leaders also stressed the importance of bolstering the Mercosur trade group, which consists of Uruguay, Argentina, Brazil, and Paraguay and which Haddad, the finance minister of Brazil, has noted had been neglected in recent years.
Politicians from both nations have already explored the concept in 2019, but the central bank of Brazil objected at the time.
According to the newspaper, the plan would begin as a bilateral collaboration before being expanded to include other Latin American countries. It also stated that an official announcement was anticipated during Lula's visit to Argentina, which begins on Sunday night.
In a joint statement, the two presidents stated that they wanted Mercosur to "constitute a foundation for our effective integration into the globe, through the negotiation of balanced trade agreements that answer to our strategic development objectives."
The Financial Times reported earlier in the day that the neighboring countries will announce this week that they are beginning the preliminary work on a shared currency.
The concept, which will be debated at a conference this week in Buenos Aires, will center on how a new currency, which Brazil considers naming the "sur" (south), may increase regional trade and lessen reliance on the U.S. dollar, according to officials quoted by the Financial Times.
