As former left-wing Brazilian leader Lula (2003-2010) seeks to connect with the business community ahead of the October presidential election, his recent proposal to create a common currency for Latin America n did not fail to surprise.
The leader of the Workers’ Party (PT, left) defended this idea during a meeting with the Socialism and Freedom Party (PSOL, left), which formalized its support for his candidacy in the next election, a candidacy that Lula will formalize on Saturday May 7, at a public meeting.
“We are going to restore our relations with Latin America. And God willing, we will create a currency [commune]because we cannot depend on the dollar [américain]” said the former president.
An idea already put forward by the Bolsonaro government
The creation of a common currency for Latin America, like the euro, is “one of the points of the economic program” prepared by the Lula team, indicates the site Metropolises. In a recent article, a former banker turned adviser to the figure on the left asserts that this currency could “to propel the process of regional integration, and to strengthen the monetary sovereignty of the countries of South America”.
Lula’s remarks sparked criticism from far-right leader Jair Bolsonaro’s camp. “I imagine how wonderful it would be for the Brazilian taxpayer [d’avoir] a single currency with Venezuela and Argentina… (irony). What does the market say about that?”tweeted one of the sons of the president, Eduardo Bolsonaro, federal deputy.
However, the idea had already been put forward in 2019 by the ultra-liberal Minister of Economy Paulo Guedes, for whom, however, this currency was only to be adopted by Brazil and Argentina. This had then received the support of far-right President Jair Bolsonaro, who had described the common currency as “dream”, remember Veja.
Excessive economic gaps
But such a project is treated “with skepticism by economists”, underlines the newspaper O Estado de Sao Paulo. Although the markets “are looking for alternatives to not depend on the dollar [américain]”a common currency would be very difficult to set up, in particular because of the “economic gaps between countries like Brazil and Argentina”. While Brazil has recorded inflation of 11.3% over the past twelve months, prices in its Argentinian neighbor have risen by 55.1%, points out the São Paulo daily.
For the former Brazilian ambassador Marcos Azambuja, adviser emeritus of the Brazilian Center for International Relations:
“The idea as a long-term goal is appealing. But there are stages to pass before it can be taken seriously.”
“Before having a single currency, countries must ensure the fluidity [de la circulation] goods and labour. Then we can start discussing a monetary union”abounds an economist.
If he reacted, the subject should however not be put forward during the electoral campaigns of Lula and his sworn enemy Jair Bolsonaro, believes Estado de Sao Paulofor who “the country’s major problems, such as inflation and unemployment, should dominate the agenda” of the two future candidates.