The launch of the euro in 1999 created expectations that the European currency would enjoy equal standing with the dollar. 20 years following the launch of the single currency, the euro has become the second most important currency in the world. But after an initial period of growth, its role in the global economy has stagnated or shrunk.

On December 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. (Communication on 5 December 2018). The objective of the Commission is not to interfere in commercial freedom or limit choice, but rather to expand the choice for market participants by ensuring that the euro represents a strong and reliable currency of choice.

The euro is a natural candidate for a diversification of the US dollar as the euro Is the second largest global reserve currency. Promoting the euro internationally attempts to counter the US-led retreat from globalisation and free markets. The European Commission has argued for a more global role for the euro amid concerns that elements of US foreign policy, such as “America first” and sanctions on Iran, cannot be bypassed in a world order where most global trade and financial transactions are priced in dollars.

But the US dollar is used in reserves, in payment systems and for funding banks because it has a massive pool of safe assets in the form of US Treasuries and stable and tested monetary and political governance. Europeans should not ignore the fact that a currency cannot be given reserve status by administrative fiat. Strength abroad reflects unity at home.