A senior European Central Bank official has called on European Union policymakers to take concrete action to strengthen the euro’s international role, warning that Europe risks falling behind as the United States and China actively promote their currencies.
In an opinion piece by ECB Executive Board member Piero Cipollone, released alongside the ECB’s annual Report on the International Role of the Euro, the central bank argues that Europe can no longer rely on passive support for the single currency’s global standing.
“The international monetary system is becoming more contested,” Cipollone writes. “Major economies that once trusted the system to work on its own are now actively shaping the use of their currencies. Europe has so far been an exception.”
According to the article, a composite measure of the euro’s international use has increased by about 1.5 percentage points since the mid‑2010s. The euro accounts for roughly 20% of global foreign exchange reserves, a share that has remained broadly stable for two decades. Issuance of international debt in euros reached nearly €1 trillion last year, the highest level since the currency’s launch.
During periods of market stress in 2025, investors turned to the euro and euro‑denominated assets as safe havens, even as they sold US dollars and Treasuries. Cipollone attributes this resilience to Europe’s openness, respect for the rule of law, central bank independence and the single market.
Targeted EU initiatives have also supported the euro’s role, with the single currency overtaking the dollar as the leading currency in the global green bond market, supported by the EU’s sustainable finance framework. Instant payments have expanded rapidly following EU legislation and the rollout of the Eurosystem’s pan‑European payment infrastructure.
However, Cipollone warns that global competition is intensifying. Nearly a third of China’s external trade is now settled in renminbi, up from negligible levels a decade ago, while the currency’s share in global trade finance has risen to 8%, surpassing the euro. More than 20% of French trade with China is already invoiced in renminbi.
In the United States, new legislation supporting dollar‑denominated stablecoins reflects efforts to extend the dollar’s dominance into digital finance.
“The world’s largest economies are taking deliberate action. Europe cannot afford to be the one that does not,” Cipollone states.
Within its mandate, the ECB said it is supporting the euro through macroeconomic stability and liquidity provision, including expanded access to euro liquidity via its EUREP repo facility. From September 2026, the ECB plans to issue tokenised central bank money for wholesale settlements and is also preparing a digital euro for retail use.
Cipollone stressed, however, that the main drivers of a currency’s international role — economic strength, geopolitical influence and legal certainty — depend on EU policymakers. He called for completion of the single market, progress on a savings and investment union, higher productivity and stronger external and energy security.
“A stronger international role for the euro will not come about by itself. We will have to choose it, and put words into action,” he concludes.
Source: European Central Bank, CNA
