Brazil’s Lula discusses common currency during Argentina trip

By Bala Chambers

BUENOS AIRES (AA) - Brazilian President Luiz Inacio Lula da Silva met Monday with Argentine leader Alberto Fernandez in his first trip abroad since assuming office on Jan. 1, during which he floated the possibility of creating a common currency between the two countries.

Following their meeting, Lula told a press conference that the two countries are exploring the possibility of establishing a common currency that would be set up through their central banks which would be aimed at strengthening "commercial and financial relations."

"Brazil and Argentina already had an experience of doing business in our currencies. If I'm not mistaken, it was in 2008, when we established that Argentines could pay in their currency and Brazilians in theirs," he said, underscoring that it was an "optional" measure that would not have a big impact.

Lula said the two countries’ finance ministers and other officials would be tasked with drawing up a "proposal for foreign trade and transactions between the two countries" which he said would be built on a "common currency.”

He also raised the possibility of creating a common currency among other Mercosur and BRICS nations, according to the Pagina12 newspaper.

Mercosur, or the Southern Common Market, is a South American economic and political bloc whose full members are Argentina, Brazil, Paraguay and Uruguay.​​​​​​​

BRICS is an acronym for five leading emerging economies: Brazil, Russia, India, China and South Africa.

"I think that this needs to happen because there are countries that at times have difficulties getting (US) dollars," underscored Lula.

Lula also touched on the issue of energy, notably Brazil's potential financing for a gas pipeline from the shale gas reserves in Argentina’s Vaca Muerta reserve in Patagonia to Brazil, insisting that it remains a possibility, while Fernandez also raised the issue of electricity reaching Argentina.

The joint press conference followed the signing of a number of deals by Lula and Fernandez relating to economic, energy, defense, health, science and technology matters, according to a communique from the Casa Rosada, or President's Office.

The purpose of Lula's visit is to strengthen bilateral relations and to participate in the Community of Latin American and Caribbean States (CELAC) Summit on Tuesday alongside a number of heads of state in the capital Buenos Aires.

Fernandez met with Lula after he was sworn in as president in early January, pledging to fully restore relations after a complicated four years during the tenure of far-right leader Jair Bolsonaro and underscoring that Lula's return to power marks Brazil’s "return to international forums."