Photographer: Geert Vanden Wijngaert / Bloomberg
Photographer: Geert Vanden Wijngaert / Bloomberg
The European Union will unveil its plan on Tuesday to strengthen the euro’s international position as it seeks to erode U.S. dollar dominance and prevent financial risks, including sanctions. in the US.
The European Commission’s blueprint sets out how the region can strengthen its economic and financial strength by strengthening the architecture of the single currency and through emerging markets as green finance, according to a draft plan. saw Bloomberg.
Calls to promote the bloc’s autonomy have been growing for years and gained steam after the US crackdown sanctions against Iran that would also punish European banks, companies and individuals doing business with the Islamic republic. The commission’s plan reflects growing pressure from member states for the EU to adopt mechanisms that will allow it to pursue its foreign policy objectives with less access to invisible alliances than SA.
“The external use of unilateral sanctions by third countries has adversely affected the ability of the EU and its member states to advance foreign policy objectives, respect international agreements and bilateral governance with controlled countries, ”the draft document states. “Unilateral actions by third countries have sometimes damaged the legitimate trade and investment of EU businesses with other countries.” The plan also includes measures that will help protect against foreign currency, and allow for greater scrutiny of foreign takeovers, according to the draft.
Volatile ally
The campaign to boost the place of the euro was first put on the EU agenda by former European Commission President Jean-Claude Juncker, who called, against an erratic partner in Washington, for steps to protect the area ‘s economies and currencies from volatility elsewhere in the world. It was during Juncker’s term, in 2018, that President Donald Trump withdrew the U.S. from the international treaty that banned Iran’s nuclear program and lifted sanctions.
According to the European Central Bank, the euro is the second most widely used currency in the world behind the dollar. But despite the latest push, there is little the EU can do in terms of policy or legislative initiatives to make meaningful use of their money.
A key focus for the EU will be the completion of key projects that will better integrate the banking sector and its capital markets. These campaigns have stalled, however, often as a result of strong disagreements between governments.
But the EU believes their infamous recovery fund, designed to help countries recover from the pandemic recession, could help support the euro. The stimulus package will provide 750 billion euros ($ 905 billion) in grants and loans, built on mutual support debt, and a third of that money will have to be spent on green projects.
Stable Finance
“Promoting sustainable finance is an opportunity to develop the EU’s financial markets into a global ‘green finance’ hub, strengthening the euro as the key currency for delivering sustainable financial results,” he said. draft plan. That would boost the EU’s share of global green bond issuance, which in 2019 comes to nearly half the total, according to the document.
Another development that could prove a game changer in that area is the ECB’s effort to introduce a digital euro, the paper said. “Further development of Europe’s digital finance sector will strengthen the EU’s open strategic autonomy in financial services and their ability to safeguard the EU’s financial stability and values.”
Brexit is also pushing the EU to support its financial infrastructure. The Commission pressured companies to move parts of their derivatives cleaning business from London to within the EU. It will set up a working group to assess potential technical issues in this regard, he said.
“We need a step-by-step masterplan that will help key businesses in the financial sector move away United Kingdom to the European Union, ”said Markus Ferber, a lawyer in the European Parliament. “A ‘just wait and see’ approach to supporting European financial markets will not.”
– Supported by Alexander Weber, and Paul Gordon