ECB head: A customs dispute from the USA is a serious economic threat. We need to strengthen the euro

The president of the European Central Bank Christine Lagarde perceives the customs dispute with the US as a serious economic threat and is in favor of a stronger euro. “In the light of current changes, it seems that it is time to increase the international role of the euro,” she said on Monday in Berlin.

The order of the world, which has existed for decades, is currently “shaken in its positions” – said Christine Lagarde in Hertie School in Berlin, cited by the DPA agency.

“Multilateral cooperation has been replaced by thinking about zero sum and bilateral games for power,” she said, not to mention the US President Donald Trump and his last threat to the EU's duties on the EU, “writes DPA. Now we have “protectionism instead of openness,” said the head of the European Central Bank.

At the same time, new possibilities are opening up, Lagarde noticed. “In the light of current changes, it seems that it's time to increase the international role of the euro.” About 20 percent of foreign exchange reserves around the world are stored in euros, while 58 percent in dollars. Since Trump announced his global tariff package, the dollar was under pressure. The euro has been stronger in relation to the dollar than ever for over three years.

“Strengthening the international role of the euro can have a positive impact on the euro area” – emphasized Christine Lagarde. It could make loans from the EU more beneficial, which would support internal demand. In addition, fluctuations in exchange rates would have less consequences, because more trade would take place in euros, and Europe would be better protected against sanctions.

According to Lagarde, to strengthen the global euro status, Europe must become stronger at several levels: geopolitical, economic and legal.

From Berlin Berenik Lemańczyk (PAP)

BML/ MMS/