On European Fragmentation and the Single Currency in an Uncertain World

Ignazio Visco
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Ignazio Visco: Governor Emeritus - Bank of Italy, Rome

Economia Internazionale / International Economics, 2026, vol. 79, issue 1, 1-26

Abstract: Europe faces growing strategic and economic challenges arising from the policies of the second Trump administration, extending beyond trade to energy, defence, digital services, and cross-border payments. Heightened uncertainty over US policy has raised concerns about the stability of the international monetary system and the future role of the dollar. In this context, some observers argue that the European Union could strengthen its geopolitical position and that the euro could assume a more prominent role as an international reserve currency. However, market fragmentation, political divisions and heterogenous legal frameworks continue to constrain this prospect. Sustaining Europe’s economic and geopolitical standing in the face of demographic, technological, and market pressures requires a coherent reform agenda aimed at deepening integration, improving policy coordination and communication, preserving economic openness, and managing the social consequences of economic transformation.

La frammentazione europea e la moneta unica alla luce dell’incertezza globale

Crescenti sfide strategiche ed economiche per l’Europa derivano dalle politiche della seconda amministrazione Trump e non riguardano solo il commercio ma anche l’energia, la difesa, i servizi digitali e i pagamenti transfrontalieri. La maggiore incertezza generata dalle politiche statunitensi solleva preoccupazioni circa la stabilità del sistema monetario internazionale e il futuro ruolo del dollaro. In questo contesto, alcuni osservatori sostengono che l’Unione europea potrebbe rafforzare la sua posizione geopolitica e l’euro assumere un ruolo più importante come valuta di riserva internazionale. Tuttavia, frammentazione economica, divergenze politiche e differenze normative e istituzionali limitano fortemente queste prospettive. Per sostenere la posizione economica e geopolitica europea di fronte alle pressioni demografiche, tecnologiche e di mercato è necessario un programma di riforme coerente volto ad accrescere l’integrazione, migliorare il coordinamento e la comunicazione delle politiche, preservare l’apertura dell’economia e gestire le conseguenze sociali delle trasformazioni economiche.

Keywords: European Economy; Single Currency; International Monetary System (search for similar items in EconPapers)
JEL-codes: E02 F02 F15 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:022208

DOI: 10.65644/EIIE.079.01.0001

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