Prime Minister José Maria Neves spoke yesterday of the possibility of allowing the euro to circulate freely in Cape Verde during his speech marking the tenth anniversary of the exchange accord between Cape Verde and Portugal. Portuguese Finance Minister Fernando Teixeira dos Santos, who came to Cape Verde to participate in the ceremony celebrating this unique financial partnership between the two countries, said that "this ambition on the part of Cape Verde is natural, given the positive results that have been achieved."

"With all due technical and political caution, we are studying the possibility of having the euro circulate in Cape Verde. It is an issue of considerable technical and political reach that merits pondering, but it constitutes one possible path within the framework of [Cape Verde's] special partnership with the European Union," said the Prime Minister during his speech.

In the view of Portugal's Minister of Finances, the euro already effectively circulates in Cape Verde, and institutionalizing its circulation in the country "is a legitimate ambition that reveals the country's macroeconomic stability. More work needs to be done on technical and normative convergence, strengthening contacts with European institutions and preparing for a more rigorous framework in terms of budgetary discipline and exchange policies," recommended Teixeira dos Santos.

The Portuguese Finance Minister also said that "Cape Verde is a reference for the governing community" and "one of the priority spaces for Portuguese cooperation," referring to the 140 million euros in financing announced for the improvement of port and highway infrastructures in the country.

Prime Minister José Maria Neves, for his part, highlighted Cape Verde's "external credibility and the atmosphere of confidence on the part of domestic and foreign private economic operators and investors" as a conquest achieved by the country, which managed to fulfill "Maastricht criteria through fiscal sustainability, price stability and the sustainability of foreign economic relations."

"The fixed exchange rate between the Cape Verdean escudo and the euro has allowed the country to soften the impact of negative external shocks, which otherwise would have had very serious consequences in an open economy such as Cape Verde's. We also have to be prepared for the consequences of the dizzying rise in the price of petroleum and grains and of the real-estate crisis," said José Maria Neves.

Cape Verdean Minister of Finances and Public Administration Cristina Duarte, for her part, affirmed that this "exchange anchor is solid and benign."