EU Pushes for Broader Global Use of Euro

Brussels, The European Commission today

published non-binding proposals to boost the role of the euro in

international payments and its use as a reserve currency.

The European Commission called on companies and states to

increase their use of the euro in energy contracts. It said it would study

possible measures to promote the European Union (EU) currency in

financial and commodity markets.

“The decision to use a currency is ultimately made by market

participants, the Commission acknowledged. The most effective way to

widen the euro’s international role was to overhaul the 19-country

currency union and adopt financial reforms that have been blocked for

years by conflicting national interests.

In the 20 years since its adoption, the euro’s international role

reached its peak at the beginning of the last decade. Its use dropped

during the 2007-08 financial crisis.

The euro has not recovered since, and the dollar remains the

currency most used in the world. Sixty percent of sovereign debt

issuance and global foreign exchange reserves are in dollars. The euro

is the second global currency, but its share of each market is just 20

percent.

The Commission admitted that a stronger euro would be

positive not only for Europe, but also for the wider world, which would

help improve the resilience of the international financial system, the

Reuters reported.

Source: Oman News Agency

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