Euro currently has no chance as a global reserve currency: 'Trust is lacking'

Since the Trump administration came to power in the US, there have been many voices in Europe advocating for a greater role for the euro in the global economy. Some even think that under this American administration, the dollar could be dethroned as the global reserve currency. However, macro-economist Jan Foesten warns that this is easier said than done. 'I understand the desire to push the euro forward now, but let's not pretend it can be achieved quickly.'

Chief economist Marieke Blom of ING recently published an article in the Financial Times, ECB President Christine Lagarde advocated for it in a lecture, and economist Heleen Mees argued for it in the News Clearly podcast Boekestijn and de Wijk: Europe must strike while the iron is hot and quickly issue joint European bonds, Eurobonds. Not only to raise money for defense investments but also because they see this as an ideal moment for the euro to dethrone the dollar as the global reserve currency. For this, it is necessary that there is enough trading in European bonds.

But achieving the status of a global reserve currency requires more, warns De Groot. 'You need the trust of the world. And you don't achieve that by issuing more Eurobonds. The euro is just over 25 years old. That makes it a youngster. The question still hanging over the market like a sword of Damocles is: will the euro still exist in ten years?'