Can a country use 3 official currencies? Panama says yes

President Ricardo Martinelli of Panama has told German Chancellor Angela Merkel during a visit to Europe on Monday that his country would like to introduce the euro as a legal tender currency in Panama alongside the U.S. dollar and Panamanian Balboa.

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Skyscrapers in Panama, Central America richest and most developed state

“In Panama the currency in free circulation is the American dollar and I told the chancellor we are looking for ways for the euro to become another currency of legal circulation and to be accepted in the Panamanian market,” President Ricardo Martinelli told a joint news conference with Merkel in Berlin.

Martinelli provided no details about the switch but he expressed “full confidence” in the German and European economies and said he expected the euro zone debt crisis would soon pass.

Seventeen of the European Union’s 27 member states are in the euro zone but the common currency is also in circulation among other non-EU countries, including Kosovo and Montenegro in the Balkans as well as tiny Monaco and Andorra, plus European overseas territories elsewhere.

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Can a country make two currencies with different rates legal tender?

Panama’s dollarized economy - almost 10,000 kilometres from mainland Europe - is one of the fastest growing in Latin America, expanding 10.6 percent last year with help from heavy infrastructure spending including the expansion of the Panama Canal.

Financial markets’ fears of a possible meltdown of the common currency have eased since the European Central Bank said it was ready to buy unlimited quantities of sovereign debt to reduce borrowing costs of vulnerable countries such as Spain.

But Merkel, head of the currency bloc’s largest economy, has said Europe needs to persevere with tough austerity measures and move towards closer banking, fiscal and political union in order to secure the euro’s future.

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Panama is known as ‘Singapore of the Americas’ due to the strategic location of its Panama Canal

There are however, some opposition among the Panamanian circles. Vice President Juan Carlos Varela said that the adoption of euro in Panama is not related to thinking in the best interests of the country. Economist Juan Jovane described the proposal as “nonsense.” He said the change would have a serious impact on the payment of wages, the collection of taxes and budgeting, among other problems.

“If one is paid in euros, and the currency drops in value, it would be a pay decrease,” the economist said. He added that there would be no problem if the two currencies had fixed values (the Balboa is pegged to the dollar at 1:1), but since they don’t, the proposal wouldn’t work. “People would always have to have their calculators with them.”

Another economist Adolfo Quintero said that the proposal would undo Panama’s effort over the last 15 years to develop as a financial center. He said that the uncertainty surrounding Europe means it is not a good time to consider adopting the euro, saying the dollar is much more stable, claiming that even European investors are looking for stability in their investments abroad.

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Panama President and German Chancellor

Source:

http://www.msnbc.msn.com/id/49458116/ns … -americas/

http://www.huffingtonpost.com/2012/10/1 … f=business

http://rt.com/business/news/panama-euro … -plan-544/

http://blog.foreignpolicy.com/posts/201 … t_the_euro

http://www.euronews.com/2012/10/15/pana … al-tender/

http://www.newsroompanama.com/business/ … anama.html

Panama GO GO GO ~~~ :lol: