If the experiment works, the government plans to extend the use of the European currency to all tourist spots, in an effort to draw more visitors to its Caribbean beaches and earn badly needed foreign exchange.

``It's a great idea. It means we don't have to change our euros into dollars and we can automatically use our own currency on holidays,'' said a sun-baked Louis O'Connell, from Listowel, County Kerry, in Ireland. ``We weren't aware of it. We almost certainly would have brought euros with us.''

Cash registers at restaurants and shops print out receipts in dollars and euros, and blue signs with the euro symbol have been posted at all hotels and other outlets in Varadero, a peninsula two hours drive east of Havana.

At Varadero shops, European cigar smokers can now pay 80.47 euros in cash for a box of 25 Montecristo No. 4 cigars, or 420.40 euros for the most expensive Cohiba Esplendidos.

Even the highway tollbooths entering Varadero are ready to take euros and give change in the European currency, though small change below one euro will be returned in dollar equivalent coins issued by Cuba's Central Bank.

``So far, no one has paid me in euros,'' said a barman at the Spanish-run Melia Las Americas hotel, as he prepared rum punches and daiquiris for tourists.

``Europeans won't have to go to the bank anymore to change their euros,'' said taxi driver Fernando Landa, waiting for a fare in a black Mercedes outside a Varadero hotel.

A sign saying ``You can pay in Euros here, too,'' hung from the mirror, showing an exchange rate of 1.14 dollars to the euro. The rate was lowered to 1.11 over the weekend to reflect the strengthening of the euro against the dollar.

Authorities equipped taxi drivers and bartenders with tables and calculators to convert to euros for services priced in dollars, the main currency used by foreigners.

Since the collapse a decade ago of its Cold War ally, the Soviet Union, Cuba has opened up to foreign investors and tourism, trying to maintain its socialist system.

In 1993, President Fidel Castro's government legalized possession of the U.S. dollar, despite four decades of political enmity and a damaging U.S. trade embargo that bars Americans from visiting the island just 90 miles (140 kms) off the Florida keys.

Cuba's $2 billion-a-year tourist industry generates 43 percent of the country's hard currency revenues.

But the slowing of worldwide travel after the Sept. 11 attacks in the United States has hurt the Cuban economy, which relies on foreign exchange to pay for vital oil and food imports once subsidized by the Soviet Union.

In the first four months of this year, tourism in Cuba dropped by 15 percent, according to official figures. Authorities hope the euro experiment will attract more Europeans. At present, more than half the tourists visiting the island come from the 12 European Union nations that began using the euro at the start of this year.

Cubans working in the tourist trade will have to juggle with four currencies in their daily lives: the Cuban peso, the dollar, the euro and the convertible peso, which is issued by the Central Bank as an equivalent to the U.S. dollar, but, like the peso, has no worth outside Cuba.

The Cuban economy is dollarized in a quasi-official way, and the legalization of the U.S. currency created social differences in an egalitarian society, since access to luxury and even essential good depends on having dollars.

Shops selling in Cuban pesos have lower quality goods and much less variety.

A popular Cuban saying is that Cuba is the only country where people earn one currency -- pesos -- but must have another to survive -- the dollar.

Many Cubans have access to some dollars, either tips from tourists or bonuses from foreign employers. But by far most of the dollars come through family remittances from Cuban exiles living in the United States.

These are estimated by the United Nations Economic Commission on Latin America to total about $800 million a year.

Cuba's government has flirted with the idea of replacing the dollar with the more politically acceptable euro. But economists advise against a switch because of the Caribbean island's natural proximity to the United States, where big business is lobbying hard to lift the trade embargo to gain access to the Cuban market.

Economists Archibald Ritter and Nicholas Rowe, of Canada's Carleton University, believe a forced adoption of the euro would create more problems for Cuba that it could resolve.