Common Currency Considered for South America


Gulf Times
May 29, 2008

South America is thinking of creating a common currency and a central bank along the lines of those in the European Union’s eurozone, Brazilian President Luiz Inacio Lula da Silva said yesterday.

The idea is a logical next step following the signing last Friday of a treaty creating a Union of South American States that aims to promote joint regional customs and defense policies, Lula said during his weekly radio broadcast.

“Many things still haven’t been realised. We are now going to create a Bank of South America. We are going to move forward so in the future we’ll have a single central bank, a common currency,” he said.

But, he added: “This is a process. It won’t be something that happens quickly.”

Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela all signed up to the Unasur treaty creating the regional union during a ceremony in Brasilia last Friday.

The entity’s goal is to bring together two trade blocs within South America, Mercosur and the Andean Community, and to integrate the region.

Brazil is also pushing for a regional defence council that could be used as a forum to settle inter-regional disputes as well as formulate joint policies.

Lula said the creation of Unasur was “the realisation of a dream,” and evidence of remarkable economic and political progress South American nations have made in recent decades.

Brazil, Latin America’s biggest economy, has taken the lead in the new entity.

But Colombia, the strongest US ally in South America and a country often at odds with neighboring Venezuela and Ecuador, has decided not to join.
Lula stated that “nobody can think of this as a crisis” in the nascent bloc, noting that several EU nations also opted out from aspects of European integration such as adopting the euro.

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