Brazil’s and Argentina’s presidents confirmed their plan to create a common currency provisionally called the “sur” in a joint op-ed published in Argentinean newspaper Perfil last Saturday. Brazil’s newly inaugurated President Luiz Inácio Lula da Silva arrived in Buenos Aires Monday for a summit with his Argentinean counterpart President Alberto Fernández, where the two will discuss strengthening trade ties as well as plan the new currency bloc, which other Latin American countries are being invited to join.

“We decided to advance discussions on a common South American currency that can be used for both financial and commercial flows,” the two leaders wrote in their op-ed, adding that a common currency would shield both countries against external forces and vulnerabilities. On Monday, Brazil President Lula told reporters the common currency would help reduce the region’s reliance on the U.S. dollar by facilitating trade.

The project will likely take time to implement, Argentina economy minister Sergio Massa told the Financial Times Saturday, comparing its rollout to the 35 years it took European countries to introduce the euro, the world’s largest currency bloc. But based on their early reactions, many high-profile economists are doubting whether a Latin American currency will ever actually come to fruition, while some argue the idea is misguided from the start.

“I’m surprised by idea of a common currency for Brazil & Argentina,” former U.S. Treasury Secretary Larry Summers wrote on Twitter Monday, adding that the plan was “highly problematic” given the economic differences and lack of political alignment between Brazil and Argentina, shared run-ins with populist political movements, and issues with fixed exchange rates.

Summers conceded he is no specialist in Latin American economies and invited other experts to comment, but even developmental economists and authorities in South American economies have been scratching their heads at the move.

“This is insane,” Olivier Blanchard, a French economist and former chief economist for the International Monetary Fund, wrote on Twitter Sunday, while José De Gregorio, a Chilean economist and the country’s former minister for the economy and governor of its central bank, called the idea a “total waste of time” on Monday.

“The announcement of a single currency is the most absurd thing I have heard and not very credible,” De Gregorio told local outlet Radio Infinita. He compared the plan unfavorably to the euro, which unlike in Latin America began with a “very deep economic union” between countries. He also warned that Brazil risked unsettling its monetary policy by integrating its currency with Argentina.

Argentina has been one of the most economically volatile countries in the world in recent years. Inflation in Argentina topped 100% in November, and the country’s revolving door of ministers and policies have caused its economic climate to bounce from interventionist government to pro-business and free market and back again multiple times over the years.

The recent bout of inflation has sparked a wage and cost of living crisis in the country whose citizens were still reeling from the pandemic’s economic shock, leading to massive anti-government protests last year.

One stable element for Argentina has been its trade relationship with Brazil, which in the first 11 months of last year was worth $26.4 billion, according to the Financial Times, a 21% increase over the same period the year prior.

In the short term, facilitating trade may be the priority for Brazil and Argentina rather than establishing a new currency, Brazil Finance Minister Fernando Haddad told reporters at the Buenos Aires summit on Monday.

“We need to see how we’ll do it, but the idea is that we may have a common means of payment between both countries,” he said, adding that the targeted level of monetary unification would not reach that of the euro.

If trade and economic reforms are the ultimate outcome of the common currency idea, that is something more economists can get on board with. 

Neither Brazil nor Argentina have the “initial conditions to make this succeed and attract others,” Mohamed El-Erian, president of Queen’s College at Cambridge and chief economic adviser at Allianz, wrote on Twitter Sunday. But he added that talks including at the ongoing summit could pave the way for much more robust economic changes.

“The best this initiative can hope for is that talk creates some political cover for much-needed economic reforms,” he wrote.