Lula says regulations impede BRICS bank from financing Argentina

Brazil’s leader also reaffirmed his commitment to creating the “Sur” common currency

Brazilian President Luiz Inácio Lula da Silva said yesterday that it would be difficult for Brazil to secure financial support for Argentina via the BRICS bank because of regulations that limit the organization from supporting countries that are not member states. He added that Brazilian authorities would hold meetings this week seeking to change the rules.

The Brazilian leader was speaking at a press conference during this week’s summit of South American presidents in Brasilia. The BRICS are a bloc of emerging economies that include Brazil, Russia, India, China and South Africa. Together they fund the New Development Bank, whose current leader is former Brazilian President Dilma Rouseff.

“Since my trip to China, I have spoken to Xi Jinping to see whether the BRICS could lend, or at least give guarantees so that Brazil could lend money – not to Argentina, but to pay Brazilian exporters,” Da Silva said in response to questions from journalists. “Our businesspeople export billions of dollars to Argentina, they have to receive dollars. Argentina has a dollar problem, so a swap guaranteeing Argentina could pay Brazilian businesspeople would be necessary.”

He said that this had not been possible, but that Brazilian authorities planned to speak with BRICS bank governors to see whether they would be willing to change an article forbidding  the BRICS bank from financing non-BRICS countries’ banks. “That meeting is happening this week. There appear to be difficulties,” Da Silva said.

Following a lengthy bilateral meeting between Da Silva and Argentine President Alberto Fernández in the Alvorada Palace presidential residence in Brasilia earlier this month, the Brazilian leader had promised to push for a change to the rules.

Da Silva reiterated his call for the creation of a common South American currency. In January, Argentine President Alberto Fernández met with Da Silva in Buenos Aires and the pair announced plans to draw up a common currency, the “Sur”, that would coexist with the peso and the real, allowing countries to do business without having to go via the dollar. 

“I stand by the idea that we can’t keep doing business in dollars,” Da Silva said. “We have to create a currency between our countries.” He added that doing international trade via the dollar, including with countries like India and China, made business harder.

UN Security Council

During the conference, Da Silva also said he wishes for Brazil to become a permanent United Nations Security Council member representing South America, arguing that the current five permanent members – China, France, Russia, the UK and the US – “no longer represent geopolitical realities”. 

“Geopolitics has changed. That’s why we believe South America needs to have a greater and more effective participation [in the council],” he said. 
“It’s a really big change we’re looking to make to world geopolitics.”


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