The introduction of the euro will affect foreign exchange and financial markets and economic activities around the world. What risks and opportunities does the euro represent for Latin America and the Caribbean?
ON JANUARY 1, 1999, a new era of European economic and monetary union (EMU) began when 11 of the 15 member countries of the European Union (EU) replaced their national currencies with a single currency, the euro. Will the introduction of the euro have real economic effects, or will it be primarily an accounting phenomenon? As far as the countries of Latin America and the Caribbean are concerned, the euro will probably affect their trade with Europe only slightly, but it will have a somewhat greater impact on their financial markets and debt-management policies over the short and medium terms.
Suggestion for further reading:
Robert A. Feldman and others, 1998, The Impact of EMU on Selected Non-European Union Countries, IMF Occasional Paper No. 174 (Washington: International Monetary Fund).