Increasing the International Role of the Euro: A Long Way to Go

Marek Dabrowski

No 502, CASE Reports from CASE-Center for Social and Economic Research

Abstract: The euro is the second most important global currency after the US dollar. However, its inter-national role has not increased since its inception in 1999. The private sector prefers using the US dollar rather than the euro because the financial market for US dollar-denominated assets is larger and deeper; network externalities and inertia also play a role. Increasing the attractive-ness of the euro outside the euro area requires, among others, a proactive role for the European Central Bank and completing the Banking Union and Capital Market Union.

Keywords: global currency; dominant currency; euro; US dollar; international monetary system; European Union; euro area; network externalities; power of incumbency (search for similar items in EconPapers)
JEL-codes: E42 E58 F33 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:sec:report:0502

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