After the end of the Celac meeting, Lula da Silva visited José Mujica, who was president of Uruguay during the previous mandate of the Brazilian. In this context, they talked about various topics, but specifically the most discussed was the creation of a common currency within Mercosur, an idea with which the Uruguayan was very critical.
Source: (UOL)
The former president of Uruguay He indicated that in the political group there is already a Payment System in Local Currency that “is not fulfilled”, which is why he stressed that it is much easier to “start there”, instead of trying to revolutionize the economy. “Right away we go to the great thing. We want a central bank for America!”, the Montevidean politician maintained and pointed out that before this measure is taken, “many stages” have to go through.
This was not the only thing that Mujica expressed, as he commented that “humans are mythological, we have to symbolize ideas.” “We have to do things for humans, not for economists. If we don’t give the masses a myth, the masses won’t understand”, was one of the arguments used by the former president of Uruguay to criticize the proposal.
The meeting was held at home of the politician of the Popular Participation Movement and different members close to him were part of this, such as his wife Lucía Topolansky, the president of the Pit-Cnt, Marcelo Abdala, and the mayor of Canelones, Yamandú Orsi. For his part, the Brazilian committee included the economy minister, Fernando Haddad, and Lula’s international adviser, Celso Amorim.
What is the system Mujica is talking about
The Local Currency Payment System is a measure established in 2008 that served to strengthen the links between South American companies, since it would be a way to carry out foreign trade operations without depending on the dollar, something practical for Argentina to unlock various imports and exports. However, over time, many countries reduced their operation until it was almost without impact.
“For example, if the sum of the sales of the Argentine companies to Brazil that used the system were 2 million dollars one day and the sum of the sales of the Brazilian companies to Argentina that used it were 3 million dollars that day, instead of each importing company having to buy the dollars to pay its counterpart, the BCRA would only need and would be in charge of transferring 1 million dollars to the Banco Central do Brasil, avoiding all the remaining intermediation”, they explained from the Association of Importers and Exporters of Argentina in a 2020 statement, when they asked the Government to make this policy work again.