At its meeting on July 7, the Eurogroup will discuss, among other things, the role of the euro in the world, which not only remains strong but also continues to strengthen, a senior EU official said ahead of the meeting, Report informs.
"The basis for the discussion will be the latest ECB update on this issue. This discussion is taking place at a critical moment. And unlike in previous years, the interest in this update is indicatively high," he noted, linking this to the geopolitical situation and the development of payment technologies, which has important implications for the international monetary system and the role of the euro.
The ECB update concludes that overall, the euro's international role remained stable in 2024, both as a reserve and a payments currency.
"The euro remains the second most important international currency by a wide margin. If you put the stability of the euro's share in context, the dollar's share has been consistently declining. So maintaining the euro's share while some regions of the world are moving towards diversifying their use of currencies and foreign exchange reserves is a pretty good result," he said.
The source, however, declined to comment on the current euro exchange rate, which is rising against the backdrop of the dollar's decline, which cannot but have a negative impact on the eurozone.
He also doesn't believe that the thesis that the euro's improved position as a reserve currency is a result of the dollar's decline in popularity is correct. According to the official, the ECB is right to point out that the euro's current status should not be 'taken for granted.'
"President Lagarde [head of the European Central Bank] has been vocal on this issue, championing the idea of a 'Europe moment,' a 'global euro moment,' and stressing that EU policymakers need to create the right conditions for this," he said. According to him, market participants around the world are sending a similar message - there is a very positive attitude towards Europe and a willingness to participate more actively in EU financial markets.
"The question is how much we can use it," he said.
As was stated at the European Council meeting last week, it is important to increase competitiveness, deepen the single market and strengthen the international role of the euro. The Council invited European institutions, including the Eurogroup, to take this work forward, the official said.
The Eurogroup is an informal group of finance ministers from the 21 eurozone member states where the euro is in circulation. Its main task is to coordinate economic policies between these countries to ensure stability and growth in the eurozone.