ECB Says Euro Could Be Global Currency Alternative
(MENAFN) The euro could emerge as a powerful substitute for the US dollar if the 20-member union manages to overhaul its financial and security systems, according to European Central Bank President Christine Lagarde.
She made these remarks on Monday, highlighting the euro’s prospects in the evolving global economy.
Last month, the dollar dropped to its lowest point in three years amid growing market anxiety over US Leader Donald Trump’s tariff disputes.
Lagarde emphasized that Washington’s economic strategies are prompting international investors to reconsider their dependence on the greenback.
The dominance of the dollar has also been increasingly challenged due to worries about the escalating US national debt and America’s employment of the currency as a geopolitical instrument by enforcing sanctions and freezing assets.
These factors have weakened confidence in the dollar’s long-term stability.
Nevertheless, the euro is not without its own challenges. Since Western countries imposed sanctions on Russia following the Ukraine conflict in 2022, Moscow and its trading partners have progressively shifted away from using both the euro and the dollar, favoring their respective national currencies instead.
Russian statistics reveal that 90 percent of the nation’s trade with BRICS countries last year was settled in domestic currencies.
Despite these hurdles, Lagarde identified a “prime opportunity” for the euro to enhance its global standing, pointing to the trade policy unpredictability under Trump as a significant cause of investor apprehension.
“The ongoing changes create the opening for a global euro moment,” she remarked.
“But the euro will not gain influence by default – it will have to earn it.”
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