IMF sees an opportunity to strengthen the euro’s role

The International Monetary Fund’s (IMF) Managing Director, Kristalina Georgieva, wants  the euro to play a larger role in the global economy, particularly as a reserve currency and a tool for enhancing Europe’s economic resilience.

Managing Director Kristalina Georgieva was in Luxembourg on Thursday, where she delivered remarks at the Eurogroup Meeting on Enhancing Competitiveness and Addressing Internal Barriers in the Single Market.

There is much going on in the world today, from Trump’s siege on global trade with tariffs and attacks on US institutions to wars and technological advances.

However, while some see chaos, others, like Georgieva, think there’s a silver lining. “There is a great opportunity for the euro to play a bigger role globally,” she told reporters. “When you look at the search for quality safe assets, at this point it is facing constraints on the offering of this asset.”

Europe has what it takes to lead—but only if it acts boldly. Deepening the single market, advancing national reforms & using the EU budget strategically can unlock growth, innovation & resilience in the region. The time to move is now! Seize the moment! https://t.co/pPiQTE7yMb pic.twitter.com/LSINrnMLy0

— Kristalina Georgieva (@KGeorgieva) June 19, 2025

The IMF sees an opportunity to strengthen the euro’s role

Georgieva’s bold claim aligns with remarks from policymakers, including European Central Bank President Christine Lagarde, who have urged Europe to somehow turn global trade and other tensions and uncertainties to its advantage.

The Bulgarian national who has been IMF chief since late 2019, also pointed out that potential investors in the euro are still hampered by regulatory fragmentation, the lack of a “deep capital market,” an incomplete internal market, and expensive energy, all of which she tagged as “obstacles Europe can remove.”

“A dynamic, integrated European economy where the opportunities to invest in equity, where the opportunities to invest in innovative firms, is more present” would lure inflows into Europe’s single currency, she said.

“With the EU moving towards a higher level of spending in defense, towards integrating its energy system, that provides material opportunity for euro-based assets to grow,” said Georgieva.

Kristalina Georgieva’s agenda for Europe

According to her remarks at the Eurogroup Meeting, Georgieva and her team have put together a strategic agenda with three clear objectives.

The first is to remove internal barriers to deepen the single market and let firms grow; the next is to advance national reforms that align with and amplify EU-level initiatives; while the third is to use the EU budget strategically to coordinate efforts and invest in public goods.

“We do not underestimate the difficulty of delivering on this agenda and the political hurdles and vested interests to be encountered along the way,” she said. “But the alternative of doing nothing will deliver nothing. Key, in our view, is to push hard.”

For the agenda to be successful, Georgieva stated that policy leaders will have to explain reforms to the public and exert sustained pressure at the technical level.

She highlighted how regulators are known to defend their missions but are not always tasked to consider connections and externalities.

“Like a football coach, you will need to make all the players play as a team,” she said. “And to our colleagues at the Commission who hold the legislative pen, our advice would be, first, to prioritize speed and not let the perfect be the enemy of the good and, second, to not let the legal mindset dominate the economic mindset.”

She called this a crucial time when Europe’s development requires both economic rationale and objectives. There is great growth potential, but she says it can only come from Europe releasing its entrepreneurial energy.

And for that to happen, Georgieva believes Europe needs its single market now more than ever.

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