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International role of the euro

The international role of the euro

20 years following the launch of the single currency, the euro has become the second most important currency in the world. In 2018, the European Commission has started an initiative for a critical reflection on the international role of the euro considering the future of EU-27 after Brexit as well as the approaches still to be completed behind the eurozone and Capital Markets Union.

Objective

Recent shifts in global political and economic powers have pushed the EU to identify ways that promote a more diversified and multipolar system of several global currencies, reflecting the euro area’s economic and financial weight. This would also make the international economy more resilient to shocks.

The European Commission has outlined a broad and comprehensive set of initiatives to increase the trust and attractiveness of the euro. It includes the following aspects:

Completion of the Europe’s Economic and Monetary Union, Banking Union and Capital Markets Union
Measures to foster a deep European financial sector
Initiatives linked to the international financial sector
Promoting the use of the euro in key strategic sectors

Time line

On 5 December 2018 the European Commission published its communication “Towards a stronger international role of the euro”. It outlines the work streams mentioned above to increase the trust, usage and attractiveness of the euro on an international level. The European Commission’s approach has been welcomed by the Finance Ministers of the eurozone in January 2019.

Along the different work streams, the European Commission had launched a series of open public consultations between January and April 2019 in order to collect and gather feedback from a variety of sectors and actors to better understand the mechanisms which underpin the use of the single currency.

The results of the feedback received were published in June 2019 highlighting the need for coordinated action, including considerations for next steps in specific sectors. The initiative on the international role of the euro is expected to provide an important impetus for the overall planning of the new Commission and the regulatory priorities for the next five-year legislative period.

International role of the euro: the highlighted parts of the value chain are affected

EU Commission’s initiative: the role of the euro and the energy sector

We support the EU Commission’s initiative on the role of the euro, especially when it comes to the energy sector. A perfect example: the European Emissions Trading Scheme – the world’s largest and most liquid carbon market.

Theodor Weimer supports the Markets4Europe roadmap

The Markets4Europecampaign wants to improve the financing of economic growth and employment in the EU by putting markets to work for Europe. To strengthen the international role of the euro, we need to ensure that Europe’s capital markets are anchored within our own jurisdiction.

Consultations on the international role of the euro

The European Commission has launched a series of consultations to identify potential obstacles and incentives for strengthening the role of the euro in specific financial market sectors.

European Commission publishes the consultation results

Based on the market consultations, the Commission informs about the initiative to develop the international use of the euro and elaborates on the need for coordinated action, including sector-specific considerations.

The international role of the euro

20 years ago, the euro was introduced and has since become the second most important currency in the global monetary and financial system. The euro’s good reputation is a sound basis to take next steps towards a more strongly integrated EMU, Banking Union and CMU.

EEX: response to the Commission’s consultation on the role of the euro

EEX supports the Commission’s initiative, especially when it comes to the energy sector. A perfect example is the European Emission Trading Scheme. It is the world’s largest and most liquid carbon market, and denominated in euro, offering great potential to promote the international role of the euro.

#EUROat20 – a stable position. Let’s build on it!

Alexandra Hachmeister, Chief Regulatory Officer

20 years ago the euro was introduced to the financialmarkets and it has since become the second most important currency. Our Chief Regulatory Officer Alexandra Hachmeister shares her thoughts on how to build on this stable position.