Brazilian’s President Seeks Regional Currency
By Stefan J. Bos, Chief International Correspondent Worthy News
BRASILIA (Worthy News) – Brazil’s president has proposed creating a regional trade currency for South America as part of broader efforts to ditch the U.S. dollar as the world’s reserve currency.
Luiz Inacio Lula da Silva made the appeal at a summit of 12 South American leaders who seeking closer cooperation between neighbors.
Speaking in Brasilia, the capital, Lula urged state banks across the continent to cooperate to reduce dependence on “extra-regional currencies” without naming the U.S. dollar.
He follows the lead of other big powers, including Russia and China, who announced effectively ditching the dollar in bilateral trade. In April, the Chinese yuan replaced the US dollar as the most traded currency in Russia, a year after the invasion of Ukraine led to more Western sanctions against Moscow.
Lula appeared to urge similar moves and said South America should discuss a common energy market and integration of the region’s defense and security.
Amid a renewed left-wing tide in the region, the Brazilian leader organized the South America Summit to help revive the Union of South American Nations or Unasur.
The bloc was launched in 2008 to boost cooperation but became largely defunct about a decade later in disputes over leadership.
RIGHT-LEANING LEADERS
Countries with right-leaning leaders at the time – including Brazil – saw the grouping as having a leftist bent and objected, especially to including Venezuela’s authoritarian leftist President Nicolas Maduro.
However, Lula told delegates that “as long as we’re not united, we won’t make South America a developed continent in all its potential.”
The talks about ditching the dollar among South America’s major economies were due to add more pressure on the United States, where the White House and the U.S. Congress were trying to prevent the nation’s first default in its history.
The U.S. Treasury moved the day the United States would hit its borrowing limit to Monday
June 5, though it cleared its first procedural hurdle in the U.S. House of Representatives.
For the moment, financial markets appeared to have calmed as prospects recede of global economic chaos that would result from the world’s biggest economy defaulting on its $31.4 trillion debt.
Yet back in Brasilia, South American leaders searched for ways to reduce the impact of the U.S. dollar and Washington’s policies on their economies.
Lula, for instance, criticized U.S. sanctions against Venezuela and said claims that its government is authoritarian are a “narrative” pushed by Western countries.
MADURO WELCOMED
Venezuelan leader Nicolas Maduro was welcomed at the summit after years of isolation by right-wing leaders like Brazil’s former president, Jair Bolsonaro, who labeled the socialist leader a “dictator.”
“Latin America must play a united role and have a united voice,” Colombian President Gustavo Petro told journalists while arriving at the gathering.
However, Chile’s Gabriel Boric disagreed with some of Lula’s remarks about U.S. sanctions on Venezuela, adding that the region needs to respect human rights.
However, he welcomed the resumption of multilateral talks involving Maduro.
The only South American head of state unable to attend the summit was Dina Boluarte of Peru.
Peruvian prosecutors said they opened an investigation against Boluarte and former President Pedro Castillo for allegedly laundering money as part of a criminal organization.
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