The President of the European Central Bank is of the opinion that the euro could become an alternative to the dollar

The euro could become a viable alternative to the dollar, bringing huge benefits to the 20 states using the single currency, if governments only strengthen the financial and security architecture of the block, the president of the European Central Bank, Christine Lagade, said on Monday.

Christine Lagarde, President of the European Central Bank Photo: Adevărul (Archive)

Affected by US economic policy, global investors have reduced their exposure to assets in dollars in recent months, many opting for gold, without looking for a direct alternative.

In fact, the global role of the Euro has stagnated in recent decades, given that the EU financial institutions have not been completed and governments show a reduced appetite for increased integration, writes Agerpres.

“The current difficulties create the opening for the global moment of the euro”Lagarde told Berlin. “The euro will not get influence if we do nothing, we have to win it,” said the ECB official.

For this, Europe needs a more extensive, more liquid capital market, it has to strengthen its legal foundations and support the commitment to open the trade with defense capabilities, Lagarde argued.

For years, the role of the dollar has been declined and now represents 58% of the international reserves, the lowest level of the last decades, but above the weight of 20%.

Any increased role of the euro must coincide with a higher defense solidity, to support the partnerships, explained Lagarde, adding: “This is because investors – and especially official investors – also seek geopolitical insurance in another form: they invest in assets of regions that are reliable partners in the field of security and can honor alliances with significant military power “said the president of the European Central Bank.

The official appreciated that Europe should make the Euro the currency chosen by companies operating in international trade, this can be achieved by boosting new commercial agreements, improving cross -border payments and liquidity agreements with ECB.

Reforming the internal economy could be more pressing. The capital market in the euro area is still fragmented, inefficient and does not have enough liquidity, not attractive for investors, Lagarde appreciated.