Dollar control: Not ready to challenge the EuroUSD, ECB officials say
The euro cannot immediately trade in the dollar as an anchor for the global financial system, as the countries using it are still far from reaching financial and economic integration, said Gabriel Mahlf, a member of the council that manages the European central bank.
The governor of the Central Bank of Ireland said that control of the dollar will decline over the long term, but for now, Europe does not have a single financial capacity for secure assets like the Treasury Department, which reflects the US system.
“Frankly, the European economic system has not yet been formed,” Mahlf said at an economic conference in Aix-en-Provens, France.
The currency movements that have seen the euro be grateful for the dollar are more attributable to investors’ concerns about the US rule of law, he added.
“It’s a bit far from saying that it will lead to a sudden replacement for the euro because the euro is not ready to do it,” Mahluf said.
Still, he repeated the calls of his colleagues in the ECB in Europe, using the current environment of global uncertainty as an opportunity to enhance his own security, lift barriers within the single market and increase co-finances for shared targets.
“These opportunities to actually increase the EU’s position and strengthen its issues of sovereignty and autonomy should take them,” Makhlouf said.