At a recent economic conference in France, Gabriel Makhlouf discussed the future of the euro and its role in the global financial system.
Euro Not Ready to Compete with Dollar
Gabriel Makhlouf, a member of the ECB Governing Council, pushed back against the narrative that the euro could replace the dollar as the world's dominant currency. He emphasized that Europe lacks the necessary structural and fiscal integration to support such a shift. 'Frankly, Europe’s economic system is still not formed,' he remarked.
Need for Deeper EU Integration
Makhlouf pointed out the absence of critical elements in the eurozone, such as a unified fiscal authority or a safe asset comparable to US Treasuries. This limits the euro’s appeal as a reserve currency. 'The euro cannot quickly supplant the dollar as the anchor of the world’s financial system,' he added.
ECB Strategy Amid Global Changes
In his remarks, Makhlouf called for bold reforms to enhance the European Union’s economic sovereignty. He noted that current global changes present an opportunity to strengthen the euro's international status and expand joint financing for common priorities.
Gabriel Makhlouf's comments highlight that substantial work remains to be done in terms of integration within the EU for the euro to achieve a more significant role on the global stage.
