Within the framework of the various proposals for dollarization of the Argentine economy, Paul Krugmannwinner of Nobel Prize in Economics in 2008, indicated that the country would eventually want to adopt the euro as the official currency, relying on its volume of foreign trade.
“Argentina trades almost twice as much with the European Union what with USA. In any case, they should adopt the euro,” said the Krugmann on his social networks, in an exchange he had with Brad Setsereconomic specialist Council on Foreign Relations.
Previously, Setser had stated that “if USA and Canada are not an optimal currency area, so there is no way that North and South America be an optimal monetary area”. “South American exports are not linked to the cycle of USAbut to the Chinese/global commodity cycle. The dollar is not a commodity currency“, he added.
The Argentine exports in June 2023 they were from US$ 33,509 millionaccording to national chancellery. Of that sum, the USA represented a 7.9% of sales, which places it in the third most important economic destination behind Brazil and China. For her part, the European Union concentrated the 10.1% of the Argentine exports, although the trade balance was in deficit: the 14.6% of national imports they came across this organism.
Moneda Sur: the common currency between Argentina and Brazil
The “South Coin“, was the name given to the proposal for a common currency between two of the main economies of Latin America. It was scrutinized this year by the two presidential candidates of Union for the Fatherland: Sergio Massa and John Grabois.
In his role of Economy Ministerin January 2023 Massa gave an interview to the Financial Times, where he maintained that the South Coin would run parallel to the Argentine peso and to brazilian realbut that the necessary parameters for a common currencywhich includes everything from tax issues to the size of the economy and the role of central banks”. “It would be a study of trade integration mechanisms,” the official clarified.
For his part, John Grabois detailed a currency proposal with the same name, “Southern Coin”“, within the framework of his electoral campaign. Understanding that “the weight is dead“, the social leader aimed to “create a new currency, a common currency with our sister countrieswith which we share the business cycle”.
Highlighting the currency’s similarities to the Eurothe candidate considered that the South Coin would allow “stabilizing the economy, ending the inflation and strengthen the wages”. “The South Coin it could be rapidly implemented in two sequential steps. First, for the trade between countrieswe save foreign currency, and second, as a common currency“, he assured.
In another context, Lula da Silva expressed himself in favor of a common currency with the countries that make up the BRICS. “Why does Brazil need dollars to trade with China, with Argentina? It can be done with local currencies. Europe did it with him Euro and we are more than half of humanity. That is why I say that we must discuss, have a currency to negotiate between us,” the Brazilian president said at a press conference.
Source: Ambito
