November 8, 1998
Cuba backs euro currency as balance to U.S. dollar

                  HAVANA, (Reuters) - Cuba on 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

                  "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

                  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 legalised 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.

                  Copyright 1998 Reuters Limited