A few hours after the confirmation of the return of Lula Da Silva to the presidency of Brazil, the Minister of Economy Sergio Massa came out to promote a “Supranational Central Bank”, an entity that should deal with the coordination of monetary policies in the common Mercosur bloc.
In an interview with El Destape, Massa stressed that there is a victory for the Workers’ Party “encouraging” for commercial relations between Argentina and Brazil.
“We worked on a project for a supranational Central Bank, with a regional trade regimeI think Lula’s presidency will speed it up. As a block, it will strengthen us, “he said.
Regarding the project of a single currency, Massa remarked that there are conversations. “Respect for individual currencies is a problem that countries ask of you, but having a common tool, a guarantor, is an idea that appears“, She said.
“For our economies it is the possibility of in a five-year program we have the tools to compete in the world of blocs in which we must live today and strengthen ourselves in the face of world trade, “said Massa.
And he added: “Our currency needs to regain strength. Inflation is explained by several factors, but one is the loss of credibility of the weight that causes people to drop quickly.”
The idea of having a common currency for Mercosur was around a long time ago, but economic differences between member countries, persistent inflationary problems in Argentina and the impossibility of coordinating a fiscal policyl to prevent the respective government deficit from emptying that project of content.
In recent years, Mercosur has hibernated amid tensions between member countries. Paraguay and Uruguay have raised the banner of lowering the common external tariff and closing more trade agreements with other countries and other blocs that stimulate regional exports.
During the Bolsonaro administration, Brazil also encouraged that path. Argentina has been increasingly cautious with openings, even if a trade agreement was signed with the European Union during the presidency of Mauricio Macri, which then remained unfinished.
Today Brazil is the largest market for Argentine products: in the first eight months of 2022 they exported more than 8 billion dollars. According to the projections of Marcelo Elizondo, specialist in international trade, “the year will end with exports of 12 billion dollars, which double sales to the other two major markets, China and the United States.
Mercosur is the most closed block on the planet e it generates only 1.5% of world exports.
“Brazil wants more internationality, Argentina is at his side imprisoned by his complicated internal needs. The imminent future of the bilateral – and regional – political link will be affected by this, “Elizondo stresses.
“Bolsonaro’s Brazil aspired to an economic opening that Argentina does not support (and Mercosur asks for consensus in this regard) and in this difference there is a good part of the relevance of the current critical state of the bilateral situation”, he stresses.
“Brazil is one of the 10 countries in the world with the lowest opening coefficient of its economy, which has caused problems in terms of investments, modernization, competitiveness and aims to change that reality.. And it will need more internationality “sums up Elizondo
AQ.
Source: Clarin
