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France has presented to other EU countries to promise additional measures aimed at raising the profile of the euro as a global reserve currency, as part of the long -standing campaign in Paris for more joint loans.
A draft of the EU statement circulated before a leaders summit at the end of this month, seen by the Financial Times, asks the institutions of the block, including the European Central Bank “to explore actions to reinforce the international role of the euro.”
The impulse was promoted by the erratic and economic policy of the president of the United States, Donald Trump, who has weakened the dominant role of the dollar, opening space for the 25 -year currency of the Eurozone to be more attractive to international transactions.
Paris argues that investors are looking for a safe shelter of the United States Treasury debt, so the EU should issue a more joint debt to serve the market, according to officials familiar with their thinking.
France and other very indebted countries, including Italy and Spain, have pressed for a long time to take more common loans to be able to spend more on priorities such as defense without adding to their national burden.
“There is a great opportunity for the euro to play a more important role worldwide,” Georgieva Kristalina Kristalina Kristalina’s managing at a meeting of EU finance ministers in Luxembourg on Thursday on Thursday on Thursday.
“When I look at the search for quality safe assets, at this point a restriction on the offer of these assets is faced. It is not by chance that it is now parked in gold,” Georgieva added, in reference to the data of the ECB that shows that gold has exceeded the euro as a reserve asset for central banks.
The president of the ECB, Christine Lagarde, wrote in the FT this week that this was “a” global euro “moment, although the block would need to reform it to take it, even creating a” wide supply of safe assets. ”
“Despite a strong fiscal position added, with a debt / GDP ratio of 89 percent compared to 124 percent in the US. “Recent estimates suggest pending sovereign bonds with at least one amount of rating by just under 50 percent of GDP in the EU, compared to more than 100 percent in the United States.”
An EU official said that this was a “classic Lagarde movement, launching French ideas” such as joint loans.
Philip Lane, the main ECB economist, said in a speech earlier this month that the design of the euro zone had resulted in a “messy of safe assets” and that a way to respond to this would be to issue new common bonds to finance European projects.
However, another option would involve “a larger stock of safe assets of current national bond actions,” he said. He cited an Olivier Blanchard document from the Peterson Institute and Ángel Ubide de Citadel who proposes to replace a proportion of bonds issued by individual Europod governments with Eurobonds.
The decision to issue a more joint debt of the EU can only be taken unanimously. Germany and the Netherlands, which would have to pay for most of the debt, firmly oppose the most common loans.
A EU main diplomat said the commission will take into account Berlin’s opposition. But if the situation deteriorates “the pressure will grow especially as the economy of some member states is, well, not so well.”
The EU is already fighting to pay the almost 800 billion euros of common debt that it issued during the COVID-19 pandemic to finance the economic stimulus.
The European Commission estimates that € 30 billion per year, or a fifth of the 2028 budget, will be spent on payments, unless the debt refins. France says that issuing more debt at the top would create enough liquidity to tempt investors, according to two people familiar with the matter.
“If more Member States obtained their credit rating, there would be no shortage of safe assets called euro,” an EU diplomat said.
A spokesman for the French permanent representation in Brussels declined to comment.
The president of the European Council, António Costa, who will preside over the summit from June 26 to 27, has placed the role of the euro on the agenda as part of a broader discussion about the deepening of the single market still fragmented in the block in the middle of the current geopolitical agitation.
Costa told The Financial Times that a better integration of the single market and EU rules in the EU on savings and investments “would reinforce the overall position of the euro, based on the EU position as an open, stable and reliable partner.”
The role of the dollar was already decreasing before Trump assumed the position. At the end of 2024, the dollar represented 58 percent of world currency reserves, below 65 percent 10 years before, according to the Chatham house in the group of experts.
Currently, the euro represents about 19 percent of currency reserves, according to the IMF, a level similar to 2000 when it was created.
Additional Sam Fleming reports in London
