The Dream of a Single Latin American Currency
Could all these Latin American banknotes make way for a single currency in the region?
No easy way forward
The idea of a single currency is easy to formulate, but the path to creating it is complicated. Jacques D'Adesky from the Fluminense Federal University in Rio de Janeiro referred to the existing differences and historical rivalries, for example between neighboring Argentina and Brazil. "The formation of a single currency zone would initially require many negotiations between the future partners," he told DW, saying such a process would take years.
Economist Leandro Dias from AkinTec bank in Sao Paulo wants to wait and see whether the idea survives the current election campaign. In principle, the Mercosur economic area has already contributed to the region working more closely together. However, "most countries would like to retain their sovereignty and economic independence," Dias told DW.
Digital means of payment
A single Latin American currency, as Haddad envisions, aims to "improve trade and commercial exchanges in the countries of the region." According to his proposal, it should be supported by a central bank as a digital currency. However, in order to take the first step in this direction, a public declaration of intent by several governments is required so that negotiations can begin.
Maduro backs single currency
Venezuela's socialist president, Nicolas Maduro, whose country has been suffering from chronic inflation for years, also recently brought the idea of a single currency back into play. He suggested promoting the sucre, a means of payment used by the ALBA alliance of states, which is dominated by left-wing governments including Bolivia, Cuba and some smaller West Indies nations.
Brazilian politician Fernando Haddad christened the single currency sur
He believes using it as a regional digital means of payment could then replace the dollar. However, the sucre has not grown beyond its symbolic status, while confidence in Maduro's economic policy competence is low.
The introduction of a uniform Latin American currency would also have a political dimension, similar to that of the euro in Europe. Latin America — or South America — would be viewed as a unified economic area from both the inside and the outside, and the region would move closer together economically and socially. The sur proposed by Haddad could, therefore, be a precursor to a political development that could eventually lead to a Latin American Union, a possible "United States of Latin America."
Ramona Samuel contributed to this report from Rio de Janeiro.
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