This paper explores the role of the euro in Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine. Based on a survey conducted by the European Commission at the end of 2019 on the currencies in these countries, it looks into four dimensions: crossborder trade transactions, foreign exchange reserves, external public debt and the commercial bank sector. It finds that most of the EaP countries still prefer to use the US dollar.
However, since 2014, the euro is steadily increasing its share in trade invoicing and debt stock in a number of countries due to growing political ties and economic exchanges. Overall, Moldova stands out by a large margin as it uses the euro in more than half of its total international transactions. Meanwhile, in Georgia and Armenia the euro plays a more moderate role in most areas.
Based on these findings, the paper highlights some areas where the EU could encourage the use of the euro in the region through enhanced economic diplomacy and policy initiatives.
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