The head of the European Central Bank, Christine Lagarde, believes that the euro can become an alternative to the dollar and bring enormous benefits to the bloc. Against this background, she called on governments to strengthen the EU's financial architecture and security system.
Points of attention
- Christine Lagarde emphasizes the need for the euro to earn its influence in the international market, signaling a strategic approach to currency competition.
- As the dollar's share in international reserves declines, the Euro stands to benefit from the changing financial landscape and has the opportunity for global growth.
The euro has a chance to become a real competitor to the dollar
Most of US President Donald Trump's decisions have led to large-scale "storms" in the global economy.
Global investors have begun to reduce their holdings of dollar-denominated assets, with most preferring gold and not considering other alternatives.
According to Christine Lagarde, this is the wrong approach in the current situation.
She drew attention to the fact that the global role of the euro has not changed for several decades, as the EU's financial institutions are incomplete.
Moreover, EU governments do not show much desire to move towards further integration.
"The changes that are taking place create an opportunity for the global growth of the euro. The currency will not receive influence by default — it will have to be earned," Lagarde emphasized.
She also urged not to ignore the fact that the influence of the dollar has been rapidly declining for many years in a row, and now it accounts for only 58% of international reserves.
