HAVANA (Reuters) - Cuba Sunday endorsed the soon-to-be released single European currency as a global counter-balance to the U.S. dollar, and predicted it would weaken the impact of the U.S. embargo on the island nation.
``The euro generates advantages, because it can contribute to reducing the impact of one single country in the functioning of the international monetary system,'' declared Cuba's state-run weekly newspaper, Juventud Rebelde (Rebel Youth).
The newspaper, in an article headlined, ``Welcome to the Euro'' predicted Europe's new currency, set to be issued by 11 nations in January, would also help ease the current world financial crisis by reducing money exchange costs and risks, and by promoting lower interest rates and price stability.
In the case of Cuba, whose communist government has had a virtually four-decade-long political standoff with the United States, the currency was particularly welcome as a powerful alternative to the dollar, the article said.
``For our country, which can't use the dollar directly in international transactions because of the blockade, the appearance of the euro and its future strengthening have a special significance,'' the newspaper said.
It noted that 44 percent of Cuba's trade was with European Union nations.
``If, as is hoped, the new currency is consolidated, Cuba would stop suffering the prejudices it faces for not being able to use the dollar abroad,'' the newspaper said.
Cuban officials, particularly Central Bank President Francisco Soberon, have been paying close attention to the euro recently, with numerous articles in state press, and an international conference on the subject in Havana last week.
Juventud Rebelde said the Central Bank planned, effective July 1, 1999, to use the new euro in transactions with the 11 EU nations issuing it. It also hoped to use the euro in commerce with three fellow communist-run nations -- China, Vietnam and North Korea -- beginning in January of 2000.
Cuba's domestic economy has become increasingly swamped in recent years by the U.S. currency as an alternative to the local peso.
Up until 1993, it was a crime to even have U.S. dollars in President Fidel Castro's Cuba. Castro legalized dollars that year as part of a package of economic reforms, and many Cubans prefer them to the peso.
Havana also introduced a third currency, to be used in daily transactions on the island, called the convertible peso, which has parity with the dollar. The other peso, which most Cubans are paid in, is worth about five cents.
17:16 11-08-98
Copyright 1998 Reuters Limited.