‘You’ll find out first’, replies Haddad to a journalist about the single currency

Minister Fernando Haddad (Finance) told a journalist this Thursday (5) to “get informed first” when questioned at the Planalto Palace about the possible creation of a single currency for Mercosur.

“What single currency? There is no single currency, there is no such proposal. You will find out first,” said Haddad before leaving the place where the inauguration ceremony of Minister of Planning and Budget, Simone Tebet (MDB) took place.

The minister was sought through the press office to comment on the speech, but did not send a response until the publication of this text.

The statement by the holder of the economic portfolio was given two days after the ambassador of Argentina, Daniel Scioli, said that he spoke with Haddad about the creation of a common currency (not a single one) for the regional bloc in a meeting at the headquarters of the Ministry of Finance .

On the occasion, Scioli stated that the objective is to strengthen the trade bloc and expand ties between the countries in the region and said that each country would preserve its own currency, signaling that the creation of a single currency was discarded.

“We will work for a common currency. This does not mean that each country does not have its own currency, it means unity for integration and increased commercial exchange throughout this regional bloc. And, as President Lula said, strengthening Mercosur, expanding Latin American union is very important”, said the ambassador.

There is a technical difference between the terms. The common currency would be used in commercial negotiations between members of the South American bloc, while the single currency would replace the monetary unit of the countries that make up the group – this would mean Brazil giving up the real, for example. The best-known single currency is the euro, the currency used by member countries of the European Union.

On April 1, 2022, Haddad published an article in Sheetco-authored with economist Gabriel Galípolo (current Treasury Executive Secretary), defending the creation of a South American currency.

In the text, the pair argued that the currency could “boost the process of regional integration, marked by a slow pace and moments of retreat, and strengthen the monetary sovereignty of South American countries, which face economic limitations arising from the international fragility of their coins”.

After the conversation with Haddad, Scioli praised the minister’s commitment, whom he referred to as “a person who has a lot of experience”. “Haddad is an economist who has a very productivist ambition, an ambition of the real economy, a commitment that is also very strong with the great objectives of the common currency, which will also have a positive impact”, he stated.

According to the Argentine ambassador, the main topics discussed with Haddad last Tuesday were financial and energy integration between the countries and increased trade between Brazil and Argentina.

The creation of a common currency with Argentina was even discussed during the Jair Bolsonaro (PL) government. In 2019, the then president and his Minister of Economy, Paulo Guedes, had a meeting with businessmen in Buenos Aires in which they spoke about an incipient plan on the subject.

Since the creation of Mercosur, the bloc’s countries have mentioned the possibility of creating a common currency, but no initiative in this regard has been implemented due to differences in the exchange rate policies of the members.