The Impact Of Cuba's Economy

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The EU is already working to liberalize Cuba's economy and make it's people more free -
Emmott 2/20/14
Robin is a Brussels-based correspondent covering Europe's debt crisis, and editor of the euro zone page on He joined Reuters from the Financial Times in Mexico City in 2002. He led the drugs war coverage that was nominated for an Overseas Press Club award in the United States in 2010; " Have a cigar: Cuba and Europe to write a business plan"; Thu, Feb 20 01:25 AM EST 2014; BRUSSELS (Reuters) - Eleven months before Barack Obama's historic handshake with Raul Castro, Europe staged its own show of friendliness with Cuba. While little noticed, this gesture may end up doing far more to end the communist island's isolation. It all happened one hot January day last year at an EU-Latin America summit in Chile. Castro cheerily waved alongside European Commission President Jose Manuel Barroso for the official group picture and then, as the photo gathering broke up, German Chancellor Angela Merkel shook his hand. This was low key compared with when the U.S. and Cuban presidents greeted each other on December 10 after half a century of hostility. But all this warmth at Nelson Mandela's memorial service in South Africa has brought no radical change and the U.S. trade embargo on Cuba, imposed in 1962, remains. By contrast, the European Union decided last week to seek negotiations with Havana on increasing trade, investment and dialogue. This will mark[s] their closest contacts after years of tension about Cuba's human rights record, over which the EU imposed its own sanctions until 2008. While any accord will be modest, Havana said it would consider the EU invitation to talks constructively. Castro needs trading partners as he tries to ensure the survival of the Cuban revolution, which his brother Fidel led, through a transition from hardline communism to a more pragmatic model. The gesture from Merkel, who grew up in the now defunct East Germany, was all the more notable as her country - along with fellow EU members Poland and the Czech Republic - has been reluctant to deal closely with Cuba, partly out of a lingering distaste for its own communist past. Gianni Pittella, vice-president of the European Parliament who attended the Santiago summit, said the decision to seek negotiations with Cuba had been a long process that gathered pace in Chile. Europe's strategy is to encourage change. "Besides trade and investment, I hope it will be possible to begin a structured dialogue with Cuban civil society and with those who support a peaceful transition on the island," said Pittella, who also awarded the EU's human rights prize to Cuban dissident Guillermo Farinas last year. The proposed accord, said EU officials, would give Brussels a bigger role in Havana's market-oriented reforms, position EU companies for Cuba's transition to a more open economy and allow the Europe to press for political freedoms on the island. CARIBBEAN CAPITALISM The EU is already Cuba's top foreign investor but divisions after the summit nearly ended the overtures before they had scarcely begun. After the EU's foreign policy chief Catherine Ashton returned from Chile, the draft accord with Havana languished in the European Council's red marble building in Brussels for months, unable to gain the support of all 28 EU members. Apart from the governments in Berlin, Warsaw and Prague, Sweden also had misgivings about what they regard as Havana's repression of political dissent. "Four countries felt it was not yet the time," said one EU official who declined to be named. "In the end, the majority was able to convince them that negotiating with Cuba would be a more effective way of bringing change." What helped to change minds was Cuba's progress in implementing its five-year plan since 2011 which has relaxed the state's grip on the economy. This has been accompanied by a