This is the moment of Europe’s ‘global euro’

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The writer is the president of the European Central Bank

The global order witnesses a deep shift: open markets and multilateral rules are broken and even the foundation stone of the system, even the dominant role of the US dollar is no longer determined. Protectionism, zero thinking and bilateral power plays take their place. Uncertainty damage the economy of deep integrated in the global trading system, 30 mn at work

However, the queue on the road also offers more control over Euro to control Europe’s own fate and the euro to gain global glory of the euro. Currently, the euro is the world’s most common currency, 20 percent of global currency reserves compared to US dollars are accounting.

The increase in the global status of the euro will bring material benefits: low debt costs, currency fluctuation and insulation from sanctions and compulsory measures.

However, a step towards greater international reputation for our currency will not happen as a standard: it should be earned. As in previous periods, concerns about today’s dominant currency still do not cause great change to alternatives. Instead they are reflected in each other Rising demand for gold.

To reach the full potential of the euro, Europe must strengthen the three foundation column: geopolitical trust, economic and legal and institutional integrity.

First, the global position of the euro continues its role in Europe. The EU is the largest trader in the world – this is the number one partner for 72 countries, represent about 40 percent of global GDP. This is reflected in the share euro as an invoice currency standing in 40 percent. The EU must use this position to its advantage by closing new trade agreements.

“Excritant privilege” of an international reserve currencyIn the 1960s, Valéry Giscard d’estaing comes with responsibilities.

To prevent the eCB shortage of the euro, ECB is modified to maintaining a smooth transmission of monetary policy and expands the repo lines.

True confidence, but stands on hard facts. Investors are looking for regions responding to unions. This kind of guarantees are indicated to increase the share of a currency in foreign resources Up to 30 percent. Europe is a great turn to restore its hard power, which should also help the euro global trust.

Second, economic power is the backbone of any international currency. Successful issuers usually offer the key features trio: strong growth, to attract investment; Deep and liquid capital markets to support large operations; and a wide supply of safe assets.

However, European structural faces problems. His growth stays continuously, its capital markets are still broken and despite a strong aggregate financial status, 89 percent in the United States remain 89 percent – the supply of high quality safe assets. Recent assessments offer prominent sovereign bonds with the amount of AA rating, which is only 50 percent of GDP in the United States.

The Europe must take decisive steps by filling in the unified market and reduce the unit of regulatory loads and deciding the unity of regulatory cargo markets for the status to gain status. Strategic industries such as green technologies and defense should be supported through an ordinary EU extensive policies. Like defense, public goods can be financing, more reliable assets.

Third, the investor confidence in a currency, as a result, the power of the institutions that support it. I admit that the EU is not easy to understand. However, it provides its structured and comprehensive decision, checks and balances, stability and policy definition. Like ECB, respect for the independence of the law and the independence of the main institutions are comparative advantages where the EU should be abandoned.

We are soiling the institutional structure of Europe to bring these advantages home. A single veto should no longer be allowed to stand on the way of the collective interests of the other 26 member states. In critical areas, the voting that voted more qualified will allow Europe to talk to a voice.

History teaches us that the regimes are constantly visible, unless they are no longer. There have been changes in global currency domain before. The moment of this change is an opportunity for Europe: “Global Euro” is a moment. To seize this and increase the role of the euro in the international monetary system, we must act strongly as the United Europe has more control over their destiny.