The reason for the current negotiations is also the relatively close political connection between the two units, or that the two heads of state are almost. Argentine President Alberto Fernandez promised himself a major foreign trade deal from many of the union’s members, which could halt the decline of the Argentine economy. The current Brazilian president, Luiz Encio Lula da Silva, feels the same way. However, the path of mutual integration will be different in the case of both countries.
1. What is actually in the water?
Top Brazilian and Argentine politicians have announced their desire to discuss a joint drive in South America. They will at least use it out of the blue with their existing native currencies, but the ace can replace the Brazilian real and Argentine peso. It is speculated as uio, and according to the latest information, the unit should be called sur. From the point of view, it will mainly serve the elm, and the state undertakes from it that it will reduce operating costs or vulnerability against the US dollar.
Brazil and Argentina are the founding countries of the Mercosur trade bloc, which was established in 1991. In addition to these two countries, Paraguay and Uruguay have also joined this group, and they want to negotiate with the members of the union. Discussions about my common money have been made many times between the representatives of these nations, but they have never led to a rough end.
The reason for the current controversy is also due to the weakness of the US dollar, which made it more difficult to import food and energy, and expenses also increased, which led to the total debts of both countries.
2. How will it work?
The new combined South American unit can be used to carry out trade transactions without relying on the US dollar. It may be a matter of trading strategy, or many traders are having trouble accessing US dollars due to capital controls. A special fund could be set up under the supervision of the Brazilian Finance Minister, which, together with the banks, would provide sufficient expertise for such transactions.
The extra unit can be very similar to the European currency (ECU), which operated between 1979 and 1999 before the introduction of the daily euro. It was created as a unit of the payment system between the countries of the European Union and served mainly to drive the ethnic group and as a component of the supply chain. So it could be a kind of coin group, which would be made up of many state coins in the Jane America region.
3. Why didn’t they go to Earth for two years?
The idea for a similar project has been around at Jin America for several decades. However, Petrvage’s macroeconomic problems and political instability in both countries greatly impeded the eventual implementation of such a move. In recent years, inflation in Argentina, which has approached the hundred percent mark in recent months, has been to blame, among other things. However, in Brazil, these values are only about six percent.
4. What do you expect from the project?
Representatives of both countries believe that a common payments unit would revive regional trade. However, most economists do not follow this view and see the idea as bad timing. Former Chilean Central Bank Governor Jose de Gregorio said that Brazil is risking its sound monetary policy by gradually strengthening relations with Argentina.
5. Why stand on it in Brazil?
For the current Brazilian president, this is one way to restore this country’s brilliance on the international stage. This is connected, among other things, with the fact that shortly after his election he represented the United Nations Conference on Climate Change and suggested that such a gathering be held in Brazil for the first time in 2025. He also began negotiating with several European representatives.
6. Will Brazil be able to increase its importance in Sino-American customs?
After years of isolation under then-Brazilian leader Bolsonaro, the international community seems to want to welcome Brazil back into their midst. But the new president, Lula, will have to overcome the current turbulent situation in the country. The country is enjoying a double rate this year, and Brazil’s economic growth is expected to slow this year. The country will also have to deal with the growing influence of the United States, which is launching a whole wave of major infrastructure projects on Brazilian soil.
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