Tuesday December 27, 2022 | 10:57 a.m.
Lula da Silva’s return to power in Brazil comes to change the political course of the region and strengthen integration. After meeting with the future Ministers of Finance and Industry, Sergio Massa returned from Sao Paulo with the first signs that go in this direction. They are already considering “South” as a possible name.
Negotiations are advancing with the main trading partner to create a common currency without eliminating the peso or the real. They assure that its implementation is “realistic” and that it could be complemented with a swap between the two countries. On January 25 there will be bilateral meetings to “oil” the mechanism, says Ámbito.
At the end of last week, the Minister of Economy undertook a mini-tour to the neighboring country to meet with the main leaders of the economic team of Lula de Silva, who will assume the presidency on January 1, 2023. Fernando received him in Sao Paulo Haddad, who will be the Finance Minister of the next government, and Geraldo Alckmin, future Vice President but also Minister of Industry and Commerce, with the Development Bank within his orbit.
“There were two work meetings with the idea of making contact before the inauguration, which will be on January 1, to begin coordinating some issues of mutual interest,” explained a source familiar with the conversations. As anticipated to Ámbito, the central focus was placed on the creation of a common currency. The concept is different from the single currency because it does not include the end of national currencies.
In the Government they maintained that “the meeting was very good because the Brazilians have a look very similar to that of Massa, they believe that it is a good way to avoid going through the dollar.” From what has been discussed, the idea is that it be a regional currency and that the rest of the South American countries can gradually join it without having to eliminate their national currencies. “The feasibility is realistic, even in terms of rapid implementation. We are trying to include it for when Lula comes to Buenos Aires for the meeting of the Community of Latin American and Caribbean States”, they explained to national sources.
Swap generation project between pesos and reais
Another issue that was addressed is the possibility, once this initiative is activated, of generating a swap between pesos and reais to offset trade deficits that may exist in the bilateral balance. This would imply that the Government does not spend dollars from the reserves to pay for imports from Brazil.
On January 24, the CELAC summit will be held in Argentina. It is expected that the future president of Brazil will participate and even communicate his decision to reintegrate Brazil into the bloc currently chaired by Alberto Fernández. The decision to temporarily remove it was made by Jair Bolsonaro in January 2020 after questioning “the lack of results in the defense of democracy.”
As this medium was able to find out, for the next day, January 25, high-level bilateral meetings are being prepared in which an attempt will be made to “oil” the mechanism of the common currency for which they have even considered the name “South”.
