The impact of the Euro on Latin America

"Trade between the European Union (EU) and developing countries is important—around 22 percent of the EU's exports go to developing countries, while 20 percent of the EU's imports originate in those countries. More specifically, trade between Latin America and the EU has ballooned in recent times..." What are the risks and opportunities facing the Latin American and Caribbean (LAC) region from the introduction of the euro? Will the replacement of the European currency basket by the euro have real economic effects, or will it be little more than an accounting phenomenon? This slim volume attempts to answer those questions. In doing so it covers the current economic situation, presents financial flow, discusses the value and volatility of the euro, and the financial implications of the euro, including the banking system and foreign debt and reserve management. Overall, the report gives a broad picture of the possible impact of the euro on the LAC region.