[News Terms] 'Unasur' Gains Attention with Brazil's Lula Returning to Power

Community Called the EU of Latin America
Common Currency 'Sur' Planned Like the Euro

[Image source=Yonhap News]

[Asia Economy Reporter Jeon Jinyoung] With Luiz In?cio Lula da Silva, the president-elect of Brazil, set to be inaugurated as Brazil's president again on the 1st of next month, significant upheaval is expected in the political landscape of Latin America. In particular, attention is focused on whether a new single economic bloc, similar to the Eurozone within the European Union (EU), will be formed as he is expected to undertake the reconstruction of 'UNASUR,' the economic and political integration bloc of the Latin American region that he advocated during his previous term.

According to AP News and local Brazilian media on the 29th (local time), President-elect Lula will visit Argentina from the 23rd to the 25th of next month to hold talks with Argentine President Alberto Fern?ndez. The main agenda is expected to be the integration of South American currencies. It has been reported that Argentine officials, including economic ministers, have already visited Brazil to conduct working-level negotiations. Lula has consistently emphasized the idea of a single currency, and he has previously stated that the currency's name would be 'SUR,' meaning 'south' in Spanish.

Triggered by the discussion on the SUR currency, the long-dormant Latin American regional bloc, UNASUR, is also expected to be revived. Lula originally founded UNASUR in 2008, when a so-called 'Pink Tide' of leftist governments swept through Latin America, modeling it after the EU and including 12 South American countries. However, as Brazil, Chile, Argentina, and others shifted to right-wing governments, they sequentially declared their withdrawal, rendering the bloc ineffective and pushing it beneath the surface.

Neighboring countries of Brazil are also favorable toward the reconstruction of UNASUR. Last month, former presidents of Chile, Uruguay, and Brazil, along with over 50 political and business figures, issued a joint statement emphasizing the need to rebuild UNASUR, lending support to President-elect Lula.

However, concerns have been raised that the path ahead may not be smooth. Currently, protests rejecting the election results continue within Brazil, and on the 24th, there was even an attempted bomb attack.

Considering Brazil's current economic situation, there are worries that the establishment of UNASUR and the SUR currency itself could impose a significant financial burden on Brazil. Arminio Fraga, former president of the Central Bank of Brazil, told Bloomberg, "The cash used to fulfill Lula's pledges will hinder price stability," adding, "A large-scale fiscal expansion will negatively affect investor confidence."

This content was produced with the assistance of AI translation services.