The euro cannot replace the dollar as a dominant currency in the world, but must strengthen its global role, in part to protect the blockage in the event of trust supported in the American border, said the head of the central bank of Germany.
The dollar fell this year in response to US irregular policies, increasing appeals throughout Europe to strengthen the global role of the euro, offering investors a safe alternative refuge.
Central analysts and bankers have expressed concern about the fact that the US rates make the unpredictable commercial policy. Furthermore, they fear that the main tax cuts promised by the President of the United States Donald Trump make the United States debt unsustainable and that their attacks on the independence of the Federal Reserve have compromised the reputation of the safe port of the dollar.
“The dollar is no longer totally perceived as a safe refuge,” said the president of Bundesbank Joachim Nagel.
“Although it does not seem realistic or desirable for the euro to replace the dollar as a reserve currency in the near future, greater international importance of the euro would certainly be possible and desirable,” added Nagel.
In order for the euro to increase the international weight, the blockage needs a tax position focused on stability, predictable policies, military assertiveness, deep markets, liquids and open and a wide range of safe and high quality investments, Nagel said.
“The high savings of European families should be better channeled to increase innovation, productivity and competitiveness,” said Nagel. “Our savings are urgently necessary to finance the green and digital transition of Europe, as well as the expenditure for the defense”.
Although reducing trust in the dollar increased the value of the euro, Nagel said he was not worried about his current evaluation.
The euro must also be able to avoid the threat to the stability that derives from the growing role of Stablecoin in the financial world, said Nagel.
Stablecoins are designed to maintain their value, but without regulation, they are a risk for financial stability, since the loss of trust in them can lead to a reserve activity agreement, in particular the titles of the United States government.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
