The governments of Brazil and Argentina will announce next week preparations to launch a common currency project that could turn the two countries, South America’s two largest economies, into the world’s second largest currency bloc.
The initial intention is that this new currency — whose name, Brazil proposes, will be «the South» — will boost regional trade and reduce the impact of the dollar. In principle, both countries envisage a period of simultaneous trade with the Brazilian real and the Argentine peso.
«We will announce the decision to start studying the necessary parameters for a common currency, which includes everything from fiscal issues to the size of the economy and the role of central banks,» Argentina’s Economy Minister Sergio Massa has announced to the Financial Times.
«I don’t want to create false expectations: this is the first step on a long road that Latin America must travel,» added the minister, who assured that Argentina and Brazil will invite other countries in the region to join this project, before recalling that it took Europe 35 years to create the euro.
The official announcement is expected to be made during the visit to Argentina that Brazil’s President Luiz Inácio Lula da Silva begins this Sunday night, on his first trip abroad since he took office again on January 1.
Brazil and Argentina have been discussing a common currency for years, but the talks have never come to fruition due to opposition from Brazil’s Central Bank. Under left-wing governments in both countries, experts say, there is greater political support for the project in relation to Lula and Argentine President Alberto Fernandez.
Source: (EUROPA PRESS)
