"ECB Chief: Growing Distrust in Dollar Boosts 'Global Euro' Prospects"

# Lagarde Sees Opportunity for Euro Amid Waning Confidence in U.S. Dollar Christine Lagarde, President of the European Central Bank (ECB), noted on the 26th that diminishing confidence in the U.S. dollar offers a chance for the euro to strengthen its standing as an alternative global currency. Speaking in Berlin, Germany, Lagarde underlined that the current global climate presents a potential “Global Euro Era.” “This shift presents an opportunity for Europe to take greater control of its destiny,” Lagarde stated, adding, “However, this privilege is not something that is simply handed to us—it is something we must actively achieve.” # Challenges to Dollar Dominance Amid Economic Shifts Lagarde emphasized that the increasing trend towards protectionism and great-power competition is replacing global economic openness and multilateral cooperation. These shifts are creating uncertainties about the dollar's dominant role in the international monetary system. She also highlighted the decline in the dollar's share of global foreign exchange reserves, currently at 58%—the lowest since 1994. Despite this, Lagarde acknowledged that the euro has yet to fully convince global investors, noting that a significant portion of capital is moving towards safe assets like gold. The euro's share in global foreign reserves remains around 20%. # Structural Foundations for a Stronger Euro To elevate the euro’s international status, Lagarde outlined several crucial steps. She stressed the necessity for a robust geopolitical foundation through increased global trade participation and strong military alliances. Additionally, she called for structural economic reforms, including the integration of European capital markets and stronger political cohesion within the European Union (EU). Legal and institutional stability are essential for establishing the euro as a credible global alternative, she argued. # Path to Global Reserve Currency Status On the recent weakening of the U.S. dollar against the euro, Lagarde mentioned in an interview that Europe is seen as a stable region with sound monetary policies and an independent central bank. Reflecting this view, ECB Vice President Luis de Guindos remarked last month that while the euro is unlikely to completely replace the dollar as a global reserve currency in the short term, it is well-positioned to do so in the future. # Bloomberg Reacts to Lagarde’s Remarks Bloomberg News commented on Lagarde's speech, suggesting that European policymakers are trying to capitalize on global trade and institutional uncertainties amid anti-globalization rhetoric similar to that during former U.S. President Donald Trump’s term. This strategic shift aims to position the euro as a more attractive currency for international transactions. Lagarde’s candid reflections come as Europe faces growing geopolitical and economic challenges while seeking to redefine its role in the global financial architecture. Whether the euro can fully rival the dollar as the world's leading currency depends on both structural reforms and political determination.