EU should act to strengthen single currency's international role

Prerequisites for fully developing the potential of the euro as an international currency include sound macro-economic policies in the EU, deepening the EMU and completing the Banking Union and the Capital Markets Union (CMU). However, what is needed above all is mutual trust and a shared vision among the Member States on the future of the EU economy. These are the main conclusions from a hearing on Strengthening the international role of the euro recently held by the EESC.

A stronger euro would translate into lower transaction costs and risks for European industry and consumers. Europe would strengthen its influence in the world and boost its sovereignty. In the view of the speakers at the hearing, another reason for further enhancing the euro's international role is that the world's leading currency at this time, the US dollar, has become more politicised over recent years. Against this background, the euro has the potential to help build a multipolar and more resilient international financial system.

The speakers generally welcomed the Commission's initiative to strengthen the euro, but were critical about its possible scope. The US dollar would be and remain strong in the markets, because of market depth and liquidity. At EU level, the CMU would have the potential to develop and integrate the market, which would be important for the international role of the euro.

Upward economic convergence, increased social cohesion, a more active European diplomacy in international fora and a common European vision on certain strategic issues were considered other vital conditions for a strong euro by speakers, just as an efficient response to industrial and climate change by the European financial system.

The hearing provided valuable input into the EESC's work on its opinion related to the European Commission's communication Towards a stronger international role of the euro. (jk)