Foreign exchange agreement between Portugal and Cabo Verde may go as far as “near integration” in the eurozone

24 May 2018

The future of the exchange agreement between Portugal and Cabo Verde may come close “to near integration” in the eurozone, through the convergence of economic policies, Cape Verdean Prime Minister Ulisses Correia e Silva said in Praia on Wednesday.

The Prime Minister, speaking on the sidelines of the first two days of a seminar on the 20th anniversary of the exchange agreement between Portugal and Cabo Verde, said that the archipelago, as a small economy, needs to be inserted into dynamic economic zones, with the eurozone being one of those.

Ulisses Correia e Silva gave assurances that the Cape Verdean currency will continue to be linked to the euro, adding that joining a future single currency of the Economic Community of West African States (ECOWAS) will be considered when it is put forward.

“There is still no single currency in the ECOWAS space, it is an intention under construction and we are also in ECOWAS to safeguard the specifics of a small economy that already has a long history of trade and investment relations with Europe,” he said, cited by Portuguese news agency Lusa.

Correia e Silva recalled that more than 80% of economic relations (trade, investment and tourism) are with Europe and reinforced the need to safeguard this specificity.

The FTA between Cabo Verde and Portugal has been in force since April 1998 and assumes fixed parity of the Cape Verdean escudo (CVE) against the euro, other instruments of the agreement being the conditional short-term credit facility provided by Portugal to Cabo Verde and the adoption by Cabo Verde of macro-economic benchmark criteria of the Member States of the European Union. (macauhub)