Brazil’s President Luiz Inacio “Lula” da Silva and Argentina’s President Alberto Fernández announced the creation of a common currency called “Sur.” This currency would have a regional reach, and it would help strengthen the relationship between the two economies. The two presidents have also shown their support to bilateral commerce and the development of joined projects, among which there is a gas duct through which Argentina could export gas to its neighboring country.
2023 is a year for presidential elections in Argentina, and current president Fernández hopes that having Brazil again as an ally will help him towards reelection in October. After reaching the highest inflation peak in three decades—95% and the unavailability of receiving international support to finance public works, one of the biggest and most urgent public projects in the southern nation is this gas duct.
The first stretch of the gas duct, extending from Vaca Muerta in Patagonia to Buenos Aires, has already received financing. Now Argentina is asking Brazil to finance its extension towards the border with Brazil, approximately 1,709 miles. With this, Argentina aims to export its excess gas. Argentina stopped exporting gas many years ago, and each winter is forced to buy gas from Bolivia, a process that costs over 1,200 million dollars a month.
The new currency would only be a currency for transactions between the two countries. It would not be like the Euro, which has free circulation all over the world, and it would not substitute the Brazilian Real or the Argentinian Peso. Still, this project is still very new, just like Lula himself admitted: “we’re waiting for our finance teams to make a proposition.”
In a 16-page document, the two presidents explained the strategic alliance between the two nations, which includes the elimination of trading obstacles, a new approach towards energetic integration, as well as the outlining of common scientific, educational, and cultural initiatives.