According to a report in El Caribe, the implementation of a unified European currency will be positive for the Dominican Republic. The Counselor for the European Commission in the DR, Gabin Hamann said the DR already has strong ties with Europe. He mentioned that between 1996 and 1997 30% of all foreign investment came from European Union countries. Furthermore, he explained that 12% of the Dominican debt is with European countries. He explained that inter bank transactions will be least costly, comparisons for the purchase of products will be easier facilitating competition, and lower interests rates for European loans are forecast. Indeed, he said the new unified currency will facilitate commerce. Between 1993 and 1997, 10.5% of the Dominican exports were to Europe, with 5.2% of imports coming from Europe. He also said it European tourism is very important for the DR, with the bulk of holiday seekers coming from Europe. In 1996, 47% of all foreign currency generated by tourism came from Europe. He said that if economic conditions for Europeans improve, the DR will receive more tourism. Moreover, he said the new currency will make travel easier for Dominicans themselves as they will only need one currency for transactions in 11 countries. He said the impact of the Euro will not be immediate and the currency will be primarily used for bank transfers as it will not circulate until year 2002. He said the Euro will become a currency of reference, such as the US dollar is today. He said it is possible Dominican international reserves be kept in Euros. In Europe the Euro will start at an exchange rate of 1.16 to the US dollar.
