ECB’s President Demands Expanded International Role for Euro
(MENAFN) European Central Bank President Christine Lagarde sounded the alarm Monday on the growing volatility surrounding the U.S. dollar’s global supremacy, calling for an expanded international role for the euro.
Addressing an audience at Berlin’s Hertie School, Lagarde highlighted the risks posed by increasing fragmentation within the global financial system. She emphasized that "the changing landscape could open the door for the euro to play a greater international role."
Lagarde detailed the tangible advantages of boosting the euro’s influence worldwide, including reduced borrowing expenses for governments and businesses throughout the eurozone, increased domestic demand, and enhanced economic stability. "It would allow Europe to better control its own destiny."
Currently, the euro comprises roughly 20 percent of global foreign exchange reserves, ranking it second only to the U.S. dollar. However, Lagarde warned that its rise "will not gain influence by default."
To elevate the euro’s global standing, she proposed a strategy built on three pillars: "a steadfast commitment to open trade" reinforced by credible security measures; fortifying the eurozone’s economic fundamentals to attract international investment; and bolstering the legal framework by upholding the rule of law.
Lagarde also pointed out that the U.S. dollar’s share of global foreign reserves has dropped to its lowest point since 1994, as central banks worldwide increasingly acquire gold.
Reflecting on past shifts in the international monetary landscape, she described the moment as a unique chance for a "global euro moment."
"This is a prime opportunity for Europe to take greater control of its own destiny," Lagarde concluded. (Exchange rate: 1 euro = 1.09 U.S. dollars)
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