Cape Verde debates on "euroisation" of economy

Article Date : 05 October 2005

The Bank of Cape Verde is to promote an internal debate tomorrow on the possible euroisation of the Cape Verdean economy. The current Cape Verdean government has shown large interest in deepening ties with the European Union (EU), even promoting a possible EU membership. The basis of the discussion at the Cape Verdean central bank is a document elaborated by economist Vasco Marta, the contents of which are, for the time being, relatively unknown, even within the central bank itself. Eight Bank of Cape Verde officials will participate tomorrow in an internal debate promoted by the important institution's administrative council aimed at analysing the advantages and disadvantages of the possible euroisation of the Cape Verdean economy. "The decision is a political one and belongs to the government," but the Bank of Cape Verde, according to a source speaking to A Semana, should be prepared to issue its opinion when consulted. One difficulty that has already been identified and could serve as an impediment to the euroisation of the economy is the insufficiency of reserves for the operation in which Cape Verde escudos would be exchanged for euros should the European currency replace the Cape Verdean denomination. Cape Verde's foreign currency reserves currently stand at 13 million euros, but 7 million more would be needed in order to "guarantee" the exchange operation, sources at the Bank indicated. Another possibility to be discussed tomorrow is the circulation within the economy of both currencies, the escudo and the euro. In any case, whatever decision is eventually adopted by Cape Verde's political authorities, it will not, alerts an economist, be "a master key that will solve all of the economy's problems." The Praia government of socialist Prime Minister José Maria Neves has led a strong and visible policy towards integration into the EU. He has won support by leading politicians of the former colonial power, Portugal, for a full Cape Verdean membership in the Union. By A Semana & afrol News staff

Cape Verde debates on "euroisation" of economy

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