Lagarde: "The Euro needs joint European efforts to become an alternative to the Dollar"

Amid the increasing fluctuations in US economic policies, Christine Lagarde, President of the European Central Bank, emphasized that the Euro could serve as a practical alternative to the Dollar, potentially benefiting the Eurozone consisting of 20 countries, provided that governments work on enhancing the financial and security infrastructure of the bloc.

This was stated during a speech delivered by Lagarde on Monday, May 26th, in Berlin, where she said, "The ongoing changes pave the way for the global moment of the Euro... The Euro will not gain influence automatically, but it will have to earn it."

Lagarde pointed out that the unstable US economic policies have led global investors to reduce their reliance on dollar-denominated assets in recent months, but the lack of a clear cash alternative has driven many towards gold as a safe haven.

Nevertheless, the Euro still faces challenges hindering its rise as a global currency, as its international role has remained stagnant for decades due to incomplete European financial institutions and a lack of political will to strengthen financial integration.

The President of the European Central Bank outlined several conditions to enhance the Euro's position, including developing a "broader and more liquid" European capital market, strengthening the legal foundations of the Union, and supporting open trade policies by enhancing security capabilities.

Lagarde also called for making the Euro the preferred currency for companies engaged in international trade through new trade agreements, improving cross-border payment systems, and enhancing liquidity agreements with the European Central Bank.

Data has shown a decline in the dominance of the Dollar in recent years, now constituting 58% of global cash reserves, the lowest percentage in decades, but it still clearly outperforms the Euro, which holds a 20% share.