Cuban foothold for euro

Street vendors are already looking for euro small change

Tourists visiting Cuba's biggest tourist beach resort, Varadero, can now use the European currency, the euro.

Foreign visitors to the area, three hours east of the capital Havana, can now choose whether to pay for services in US dollars, Cuban pesos or euros.

Cuba, which is still subject to US economic sanctions and was also hit by the post-11 September downturn in tourism, now attracts over half of its foreign tourists from Europe.

The euro is making its mark outside Europe

The BBC's Havana correspondent says the euro will now probably spread into the wider Cuban economy, helped by the black market in hard currency.

Nearly two million people visited the island last year, half of them from countries that now use the euro such as Spain, Germany and Italy.

Cuban Vice-President Carlos Lage announced the euro move at a tourism fair in Berlin earlier this year.

His country sees Europe as a valuable source of revenue for its struggling economy while the US maintains its decades-old sanctions on Fidel Castro's Communist state.

The Varadero experiment is aimed at testing whether making it easier for Europeans to travel to Cuba will bring more hard currency into the island.

The resort accounts for one third of Cuba's revenue from tourism and, if the experiment works, the authorities will expand it to the rest of the island.

'Good rate'

All restaurants and shops will have to start trading in euros from Saturday.

One hotel official in Varadero, Keti Valdes, predicted the move would go well based on the experience of the resort's main hotel, which had begun accepting euros a week early.

Euros? Here?

Maria Martinez
Spanish tourist

"We work mainly with the Spanish market and Mexico, and the Spanish tourists bring euros..." the official said.

"Some of them have told us that the exchange rate we are giving them is good and they feel more comfortable."

The official admitted things had been "a bit messy" at the outset but said people had adapted well.

One Spanish tourist, Maria Martinez, said Cuban children were already asking for small change in euros.

"Some little children asked us for some euro coins and I thought: 'Euros? Here?'," she said.

"And it was a shame because I had them in the hotel room."

Dollar supremacy

The BBC's Daniel Schweimler says that tourists to Cuba need never see the local currency, the peso, since the US dollar became legal tender in 1993.

Cuba's largest potential market is the US just a short hop from the Caribbean island, but most US citizens are forbidden by law to visit Cuba.

Most Cubans earn in pesos but, our correspondents says, they want dollars since it is the only currency with any strength in the island's battered economy.