A common currency between Argentina and Brazil, which would be called “South”, will be one of the most important announcements of the meeting between Alberto Fernández and Lula
For iProfessional
01/23/2023 – 9:20 a.m.
One of the largest businessmen in the world, Elon Muskowner of iconic companies such as Twitter, Tesla and Space X, celebrated this Sunday the possibility that Argentina and Brazil have a common currency, and considered that “it is probably a good idea”.
This was expressed by the tycoon himself when responding in Twitterthe social network of which it is the largest shareholder, a message thread from the Whole Mars Catalog account, in which a note from the Financial Times newspaper was cited that revealed the plan that the authorities of both Latin American countries would have.
“Brazil and Argentina preparations for a common currency begin. Other Latin American nations will also be invited to join the plan, which could create the second largest monetary union in the world (after the EU),” the first post explained.
As reproduced by this blog, which usually informs about the news of Teslaanother of Musk’s companies, and different business issues, at the beginning this currency “would run parallel to the Brazilian real and the Argentine peso.”
“Europe took 35 years to create the euro. In Argentina, inflation approaches 100% as the Central Bank prints money to finance spending. During the first 3 years of the government of President (Alberto) Fernández, the amount of money in public circulation has quadrupled,” he said.
Whole Mars Catalog closed its thread of publications with a text of the Financial Times note in which it is mentioned that “Argentina has been largely isolated from international debt markets since its 2020 default and still owes more than 40 billion dollars to the IMF from a 2018 bailout.”
Brazil and Argentina to start preparations for a common currencyhttps://t.co/m1HIXWRrWA
— Whole Mars Catalog (@WholeMarsBlog) January 22, 2023
What did Elon Musk say about “South”?
“It’s probably a good idea“Replied Musk, which generated the comments of hundreds of other users of this social network who also gave their opinion regarding this possibility.
The beginning of the process of creating a common currency between Argentina and Brazil, which would be called “South”, will be one of the most important announcements of the meeting that this Monday will be headed by the president Alberto Fernandezand his counterpart from Brazil, Luiz Inácio “Lula” da Silva, who arrived in Buenos Aires on Sunday and will participate in the Summit of the Community of Latin American and Caribbean States (Celac) on Tuesday.
“There will be a decision to start studying the necessary parameters for a common currency, which includes everything from fiscal issues to the size of economies and the role of central banks,” said the economy minister, Sergio Massato the British newspaper.
The official stated that “would be a study of integration mechanisms“, although he clarified that he does not want to “create false expectations” yet, since “it is the first step on a long road.”
The eventual “South“It would initially work in parallel to the Argentine peso and the Brazilian real, in order to stimulate regional trade and reduce the use and dependence on the dollar. In addition, Massa told the British outlet that, although it is a bilateral initiative, will be offered to other nations in the region.
In this regard, the media added that a monetary union that it covered all of Latin America would represent about 5% of global trade and that the “South” would be the second largest common currency, behind the euro, which covers 14% of world GDP.
Probably a good idea — Elon Musk (@elonmusk) January 22, 2023
Other currency areas are the area of the ex-frank, used by some African countries and today linked to the euro, and the dollar in the eastern Caribbean. In both cases, these are areas with much less weight in the global economy.
