The euro in a world of dollar dominance: between strategic autonomy and structural weakness

Abstract

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. (author's abstract)