“The South”: how is Lula’s project to create a single currency in Latin America | ‘We can’t rely on the dollar’

Less than six months before the elections, the former President of Brazil and candidate for the Workers’ Party (PT), Luiz Inacio Lula da Silva, drive this saturday Creating a single currency in Latin America In the context of expanding relations between the countries of the region. “There is no need to rely on the dollar.Lula said in a speech before the electoral conference of the Socialism and Freedom Party, in which the party announced its support for the former president of the October elections.

The economist defends the idea of ​​a single currency for Latin America Gabriel Galibolu, the former head of Banco Fator, who collaborated with the Lula Government programme. In a recent article published in the magazine Folha DS Paulosigned by the economist and former mayor of São Paulo, Fernando Haddad, both strengthening its implementation, in a model similar to the European Euro, A way to increase regional integration and strengthen the monetary sovereignty of the region. Meanwhile, Lula has finished ratifying the bill should he be elected president: “We will restore our relationship with Latin America. God willing, we will create a currency in Latin America,” he told thousands of militants.

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The new South American digital currency will be called SUR and “to be issued by a Central Bank of South America, with an initial capitalization to be implemented by the member states, in proportion to their participation in regional trade,” adds the text signed by Galibolu and Haddad.

For both leaders, the SUR will be capitalized “with the international reserves of the countries and/or with a tax on exports from countries outside the region. The new currency can be used for trade and financial flows between the countries of the region.”

In addition, member states will “receive the initial endowment of the SUR, according to agreed clear rules, and will be free to adopt them at the national level or maintain their own currencies. The exchange rates between the national currencies and the SUR will be floating.”

The plan of Lula’s government is still under development and, according to those close to the leftist leader, should be completed in the coming months. Although there is no definition of what will be included in the final text, his endorsement of the coin indicates his approval of the idea.

Lula’s proposal is not new. In August 2021, the current Minister of Economy, Paul Geddeshe said that Mercosur’s single currency would allow for greater integration and a free trade area, and would create a currency that could be one of the “five or six related currencies of the world”.

Lula, who announced he will confirm his candidacy on May 7, is emerging as the front-runner in all opinion polls ahead of the October elections, in which President Jair Bolsonaro will try to re-elect him.