The topic was at the center of discussions on Feb. 16 in Brussels at a meeting of EU finance ministers discussing the rise of the euro.
“In light of recent geopolitical developments, the risks of the financial and monetary system being used as a political tool have materialized,” said Greek Finance Minister Kyriakos Pierrakakis, who chaired the meeting, euobserver.com wrote. -It is crucial for us to ensure the international role of the euro, as this is of direct importance for the EU’s monetary sovereignty.”
The European Commission, in a 30-page document prepared ahead of the meeting, also warned that global trade and capital flows are “increasingly fragmented along geopolitical lines.” And that “trade barriers and financial sanctions are increasingly being used as geopolitical tools,” referring to Trump’s announcement of a trade war in April 2025.
According to EU Economic Commissioner Valdis Dombrovskis (whose team was tasked with the report), one of the objectives was to identify “obstacles” to wider adoption of the euro.
In a number of neighboring regions, the euro is “falling short of expectations” given the EU’s role as their main trade and investment partner, the paper said.
The paper called on EU capitals to “engage with key sectors such as transport, energy, raw materials and defense to strengthen the role of the euro in procurement, invoicing, pricing and payments” and to increase the number of contracts awarded in euros rather than dollars.
Increasing the share of energy imports priced in euros would protect European companies from exchange rate fluctuations and reduce their need to seek dollar liquidity during crises, as well as reduce their dependence on the U.S. financial system.
Euro liquidity
The debate comes days after the European Central Bank updated> its liquidity facilities in the euro area, expanding access to them to non-euro area central banks.
By making it easier for foreign central banks to access euro funds in unfavorable market conditions, Frankfurt aims to make the currency more attractive as a reserve and transactional instrument.
“As geopolitical tensions rise … stress in financial markets is likely to become more frequent,” ECB President Christine Lagarde said at the Munich Security Conference last week. – Having a lender of last resort for central banks around the world increases confidence in investing, borrowing and trading in the euro.”
Eurobonds
The paper looks at the possibility of pooling more EU-level [Eurobond] issuance under a single framework and continuing common borrowing to finance projects with “clear added value for the EU”.
Since 2020, the EU has become the third-largest issuer of AAA-rated government bonds in the world, providing investors with a growing pool of euro-denominated securities.
“The global market is increasingly wary of the U.S. dollar. It is looking for alternatives. Let’s offer it European debt,” French President Emmanuel Macron told reporters last week ahead of an informal meeting in Antwerp.
He later called it a “great idea” at the Munich Security Conference.
Bundesbank chief Joachim Nagel also urged the EU to issue more joint debt, backing away from Germany’s traditional stance against eurobonds.
However, German Chancellor Friedrich Merz remains strongly opposed: “I cannot agree to financing EU projects with Eurobonds.”
