Quito, Aug 11 (Xinhua) Ecuador Monday took over the rotating presidency of the Union of South American Nations (UNASUR) from Chile.

At a ceremony in San Agustin Convent here to mark the occasion, Ecuador's President Rafael Correa said UNASUR is 'a political option', has many challenges like creation of a common reserve fund, a common monetary system and new policies to restructure the external debt of member states.

He also proposed to create an observation commission under the UNASUR to monitor the electoral process in the region. He said the region 'does not need foreign observers' like the European Union for that purpose.

The heads of states from the 12-member block attended the event.