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Dorte Verner - The impact of the Euro on Latin America

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Trade between the European Union (EU) and developing countries is importantaround 22 percent of the EUs exports go to developing countries, while 20 percent of the EUs 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.

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title The Impact of the Euro On Latin America World Bank Latin American - photo 1

title:The Impact of the Euro On Latin America World Bank Latin American and Caribbean Studies
author:Verner, Dorte.
publisher:World Bank
isbn10 | asin:0821346202
print isbn13:9780821346204
ebook isbn13:9780585222752
language:English
subjectLatin America--Foreign economic relations--European Union countries, European Union countries--Foreign economic relations--Latin America, Euro.
publication date:2000
lcc:HF1480.5.Z4E858 2000eb
ddc:337.4/08
subject:Latin America--Foreign economic relations--European Union countries, European Union countries--Foreign economic relations--Latin America, Euro.
Page i
The Impact of the Euro on Latin America
World Bank Latin American and Caribbean Studies
Viewpoints
Dorte Verner
The World Bank
Washington, D.C.
Page ii
2000 The International Bank for Reconstruction and Development / THE WORLD BANK
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First printing February 2000
The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries.
The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A.
The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countries and regions. The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Ina, 75116 Paris, France.
Library of Congress Cataloging-in-Publication Data
Verner, Dorte.
The impact of the Euro on Latin America / Dorte Verner.
p. cm. (World Bank Latin American and Caribbean studies)
Includes bibliographical references.
ISBN 0-8213-4620-2
1. Latin America Foreign economic relations European Union countries. 2. European Union
countries Foreign economic relations Latin America. 3. Euro. I. Title. II. Series.
HF1480.5.Z4 E858 2000
337.4'08dc21 99-054940
Page iii
Contents
Summary Findings
v
Acknowledgments
vii
I. Introduction
1
II. Economic Relations between the EU and Latin America
3
Picture 2
The Market
3
Picture 3
Trade
3
III. The Financial Relations Between EU and Latin America
8
Picture 4
Foreign Direct Investment
9
Picture 5
Portfolio Flows, Diversification, and Reallocation
9
Picture 6
Interest Rate Sensitivity of Short-Run Capital Flows
11
IV. Value and Volatility of the Euro
13
V. Financial Implications
15
Picture 7
Banking System
15
Picture 8
Debt Management
16
Picture 9
Reserve Management
18
VI. Regional Integration
20
Picture 10
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