European Central Bank President Christine Lagarde, in a freshly published article in the *Financial Times*, urged active measures to enhance the euro's role on the global stage, highlighting the worsened situation after Donald Trump's election in the United States.
Need for Changes in Euro
Christine Lagarde asserts that the euro, being the second most popular currency in the world, must take a more significant role in the global financial system. She noted that the rise of protectionism and bilateral agreements from the U.S. creates a necessity for Europe to act more assertively on the international scene.
CITE_NA: "This moment of change is an opportunity for Europe: it is a ‘global euro’ moment."
Structural Issues in Europe
Lagarde pointed out three key areas where Europe is lagging: geopolitical credibility, economic resilience, and institutional strength. She emphasized that without necessary reforms and improvements in these areas, the euro would struggle to compete effectively with the dollar. For instance, the volume of high-rated sovereign bonds in Europe makes up only 50% of GDP, significantly lower than U.S. figures.
She stressed the need to complete the single market and create unified actions to support key sectors like green energy and defense.
Strengthening Institutional Foundations of the Union
Lagarde also highlighted the need for institutional changes within the European Union. She noted that the decision-making system in the EU requires improvement to ensure a unified stance from the 27 member states. "A single veto must no longer stand in the way of the collective interests of the other 26 member states," she wrote.
Lagarde assured that unity could allow for assessment of historic change moments, which she reminded all policymakers.
In her article, Christine Lagarde emphasizes that time will not wait and Europe must act decisively to enhance the euro's role in the international monetary system, thus strengthening its position on the global stage.
