The inquiry into the global significance of the euro, which is the second most important currency in the international financial system after the US dollar (hereinafter, the dollar), should be treated as a priority in efforts to strengthen the EU’s strategic autonomy.
The main obstacles impeding the further internationalisation of the euro include the lack of a sovereign behind it and the heterogeneity and structural problems of the euro area member states.
The international status of the euro can be actively improved by strengthening its role in the green transformation as well as in the further deepening and integration of the financial markets in Europe – and by promoting the “digital euro” project.
The current trends of growing geopolitical rivalry, digitalisation, and the rise of platform companies in the global economy will steer the international financial system towards greater regionalisation.
About the Author
Dr Paweł Tokarski is a Senior Associate in the EU / Europe Research Division at SWP.