17 Feb 2020

Call for Tahiti to adopt euro to counter China's growing presence

8:44 am on 17 February 2020

There has been a call for French Polynesia to adopt the euro to counter China's growing presence in the region.

The proposal was made by a French National Assembly member Benoit Simian when the Assembly's finance commission queried the leaders of the Bank of France.

Mr Simian said as French Polynesians are European citizens, adopting the European currency would legitimise such citizenship.

French Polynesia, New Caledonia as well as Wallis and Futuna use the French Pacific franc which is issued by a Paris-based institute and whose value is tied to the euro.

When asking the Bank of France representatives about strengthening European influence in the region, Mr Simian received no reply.

Mr Simian quoted a former French president Jacques Chirac as saying the adoption of the euro should happen in both French Polynesia and New Caledonia at the same time.

There have been calls for such a currency swap in the past, arguing it could boost business and help tourists wanting to use a global currency.

However, others fear such a change could be inflationary.

In September, New Caledonia will have another referendum on independence from France which could also raise the question whether New Caledonia wants to retain the currency.

Vanuatu, which also used the colonial French currency introduced after the Second World War, opted to create the vatu once it became independent in 1980.