Brazil/Argentina: Talks for the adoption of a common currency
On Sunday, Brasilia and Buenos Aires announced that they had begun talks to create a common currency that should be used for financial and trade flows. Secondly, the other countries of the continent could be invited to join this monetary union. The idea, which had germinated in the 1990s at the initiative of the Argentine President but which has always been refracted by the Brazilian central bank, has just been revived by the Brazilian Finance Minister. In addition to strengthening their commercial relations, the objective of the two countries of South America is to free themselves from their dependence on the green note.
If a name has already been mentioned for this currency (the « on », which means « South » However, Brazilian real and Argentine peso are not close to disappearing. Firstly, because a new currency is complex to set up, it took no less than thirty-five years for the euro! Unlike the European currency which is used for all transactions within the Community bloc, this new currency should not circulate in Brazil and Argentina, but rather be a unit of account allowing commercial payments to be made between the two countries. It could be assessed against numerical stables. However, this point remains to be discussed.
Argentina and Brazil represent about5% of the world's GDP, three times less than the euro area (15% of world GDP). However, GDP per person stagnated in Brazil and fell by 8% in Argentina, where prices almost doubled in one year with arecord inflation rate of 95% in DecemberOne of the highest.
Today, there is onlythree monetary unions in the world:euro,CFA franc(African Financial Community) comprising eight West African countries and six Central African countries and which is stowed to the European common currency, and finally,Caribbean dollar Easternin eight of the eleven countries of the Organization of Eastern Caribbean States, including the island States of Saint Lucia and Grenada.
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