Lagarde pushes for euro global boost as the dollar slips

European Central Bank President Christine Lagarde told European policymakers on Tuesday that the euro needs to become a real global player now that Donald Trump has dragged the US dollar’s credibility into a ditch.

In an op-ed she wrote in the Financial Times, Christine said, “This moment of change is an opportunity for Europe: it is a ‘global euro’ moment.” She called for urgent action across the bloc to raise the euro’s role in the global financial system.

Christine said the US under Trump is turning away from the multilateral system that used to support global trade. She pointed to a rise in “protectionism, zero-sum thinking and bilateral power plays,” warning that this trend is already hitting Europe hard. With 30 million jobs tied to exports, the EU can’t afford to sit back while the global trading system gets restructured.

Europe must fix structural weaknesses to push euro forward

Christine said the euro is already the world’s second-most used currency, holding 20 percent of foreign exchange reserves. But the dollar, even under Trump, still controls 58 percent. She made it clear that if Europe wants to close that gap, it needs to stop relying on America’s decline and start fixing its own problems.

She laid out three areas where Europe is lagging: geopolitical credibility, economic resilience, and institutional strength. On trade, she said the EU is already the largest trading partner for 72 countries, accounting for nearly 40 percent of global GDP. Yet the euro is only used for about 40 percent of invoicing in international deals. She urged the EU to use that leverage and start cutting better trade agreements.

Christine said the ECB is already helping by offering swap and repo lines to key global partners to prevent euro shortages abroad. But that’s not enough to earn the global trust needed. “Investors seek regions that honour their alliances,” she wrote, adding that credibility alone can raise a currency’s share in foreign reserves by up to 30 percentage points.

Europe’s economy is another problem. Christine said the EU’s long-term growth remains weak, and its capital markets are still fragmented. She admitted that the EU’s total public debt—at 89 percent of GDP—is healthier than the US’s 124 percent. But the supply of high-rated sovereign bonds in Europe is small. She said only bonds with at least a AA rating amount to just under 50 percent of GDP, while in the US, it’s more than 100 percent.

She called for bold steps to fix this: complete the single market, cut regulatory barriers, and finally create a real capital markets union. She also urged EU-wide policies to support key sectors like green energy and defense, and said joint funding of public goods like military spending could help build the safe assets investors want.

Institutional changes needed to unify Europe’s financial voice

Christine said investor confidence in the euro is also tied to the strength of Europe’s institutions. She acknowledged that the EU’s structure is confusing, but said its slow and complicated decision-making system still guarantees stability, policy continuity, and rule of law. She said the ECB’s independence is one of Europe’s strongest assets, and that needs to be protected.

But she didn’t ignore the political mess. She attacked the system that allows one country to block decisions affecting 27. “A single veto must no longer be allowed to stand in the way of the collective interests of the other 26 member states,” she wrote. She said more qualified majority voting is needed in important areas to allow the EU to “speak with one voice.”

She ended her piece by reminding policymakers that dominance is never permanent. “History teaches us that regimes seem enduring — until they no longer are,” she said. Christine said the moment is here, but won’t last forever. “To seize it and enhance the euro’s role in the international monetary system, we must act decisively as a united Europe taking greater control of its own destiny.”

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