The Euro in a World of Dollar Dominance

 Susan Strange, Sterling and British Policy. A Political Study of an International Currency in Decline (R.I.I.A.) (Oxford: Oxford Uni­versity Press, 1971).

 David M. Andrews, ed., International Monetary Power (Ithaca, NY: Cornell University Press, 2006), 20–22.

 See, e.g., European Commission, One Market, One Money. An Evaluation of the Potential Benefits and Costs of Forming an Eco­nomic and Monetary Union, European Economy 44 (Brussels, October 1990).

 Marcel Fratzscher and Arnaud Mehl, eds., China’s Domi­nance Hypothesis and the Emergence of a Tri-polar Global Currency System, CEPR Press Discussion Paper 8671 (London: Centre for Economic Policy Research [CEPR], 1 November 2011); Richard Portes, “The Rise of the Euro”, CEPR, Voxeu Column (online), 14 June 2007.

 See, e.g., Barry Eichengreen, Arnaud Mehl and Livia Chitu, How Global Currencies Work. Past, Present and Future (Princeton, NJ: Princeton University Press, 2018), 174.

 Marek Dąbrowski, Increasing the International Role of the Euro: A Long Way to Go, CASE Reports 502 (Warsaw: CASE – Center for Social and Economic Research, 2020), 21.

 Tomasz G. Grosse, Monetary Power in Transatlantic Relations. Study of the Relationship between Economic Policy and Geopolitics in the European Union (Warsaw: Natolin European Centre, 2009), 87.

 Ibid.

 Colin Weiss, Geopolitics and the U.S. Dollar’s Future as a Reserve Currency, International Finance Discussion Papers 1359 (Washington, D.C.: Board of Governors of the Federal Reserve System, 2022), 2, doi: 10.17016/IFDP.2022.1359.

 Dąbrowski, Increasing the International Role of the Euro (see note 6).

 International Monetary Fund (IMF), Currency Composition of Official Foreign Exchange Reserves (COFER), https://data.imf.org/ ?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4 (accessed 2 Feb­ruary 2024).

 European Central Bank (ECB), The International Role of the Euro (Frankfurt, July 2009), Statistical Annex, p. 9.

 IMF, Currency Composition of Official Foreign Exchange Reserves (see note 11).

 Serkan Arslanalp and Chima Simpson-Bell, “US Dollar Share of Global Foreign Exchange Reserves Drops to 25-Year Low”, IMF Blog, 5 May 2021, https://www.imf.org/en/Blogs/ Articles/2021/05/05/blog-us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low (accessed 5 Sep­tem­ber 2023).

 Barry Eichengreen, “Is De-dollarisation Happening?” CEPR, Voxeu Column (online), 12 May 2023, https://cepr.org/ voxeu/columns/de-dollarisation-happening?utm_source= dlvr.it&utm_medium=twitter (accessed 5 September 2023).

 International Monetary Fund (IMF), Currency Composition of Official Foreign Exchange Reserves (COFER), https://data.imf.org/ ?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4 (accessed 2 Feb­ruary 2024).

 Eichengreen, “Is De-dollarisation Happening?” (see note 15); Serkan Arslanalp, Barry Eichengreen, and Chima Simpson-Bell, “Dollar Dominance and the Rise of Nontraditional Reserve Currencies”, IMF Blog, 1 June 2022, https://www.imf. org/en/ Blogs/Articles/2022/06/01/blog-dollar-dominance-and-the-rise-of-nontraditional-reserve-currencies (accessed 27 November 2023).

 ECB, The International Role of the Euro, July 2009 (see note 12), 58; ECB, The International Role of the Euro (Frankfurt, June 2023), 8, https://www.ecb.europa.eu/pub/pdf/ire/ecb.ire202306~d334007ede.en.pdf (accessed 5 September 2023).

 ECB, The International Role of the Euro, June 2023 (see note 12), 27.

 Ibid.

 In the first half of 2023, the EU received an AA+ rating from the Standard&Poor’s rating agency.

 European Commission, EU Investor Presentation. Investing in EU-Bonds & EU-Bills (Brussels, May 2023), https://commission. europa.eu/system/files/2023-08/EU%20Investor%20Presen tation%2026July2023.pdf (accessed 2 June 2023).

 Emine Boz et al., Patterns in Invoicing Currency in Global Trade, IMF Working Paper WP/20/126 (Washington, D.C.: IMF, July 2020).

 Eurostat, Trade Shares by Invoicing Currency (from 2010 on­wards), Online data code: EXT_LT_INVCUR, https://ec.europa. eu/eurostat/databrowser/view/EXT_LT_INVCUR__custom_ 6244660/default/table?lang=en (accessed 21 September 2023).

 Ibid.

 Bafundi Maronoti, “Revisiting the International Role of the US Dollar”, BIS Quarterly Review, 5 December 2022, https:// www.bis.org/publ/qtrpdf/r_qt2212x.htm (accessed 25 September 2023).

 Ibid. Since two currencies are always involved in foreign exchange transactions, the sum of the shares of each currency in these transactions is set at 200 per cent.

 Carter Johnson and Alexandre Tanzi, “Dollar Usage in Global Payments in July Rises to Record, Swift Says”, Bloom­berg (online), 24 August 2023 https://www.bloomberg.com/ news/articles/2023-08-24/dollar-usage-in-global-payments-in-july-rises-to-record-swift-says?sref=mPFALO8o (accessed 24 November 2023).

 SWIFT RMB Tracker. Monthly Reporting and Statistics on Renminbi (RMB) Progress towards Becoming an Inter­national Currency, SWIFT (online), August 2023, https:// www.swift.com/de/node/11096 (accessed 24 November 2023).

 SWIFT and Bloomberg data available via Marcus Ash­worth, “BRICS Raging against the Dollar Is an Exercise in Futility”, Bloomberg (online), 5 June 2023, https://www. bloomberg.com/opinion/articles/2023-06-05/brics-raging-against-the-dollar-is-an-exercise-in-futility?sref=mPFALO8o (accessed 5 September 2023).

 SWIFT RMB Tracker, August 2023 (see note 29).

 “International Role of the Euro”, Banque de France, 8 November 2021, https://www.banque-france.fr/en/banknotes/ analysing-and-anticipating/international-role-euro (accessed 5 September 2023).

 CFA franc stands for Franc de la Coopération Financière en Afrique. More about the CFA system: Fanny Pigeaud and Ndongo Samba Sylla, “Der CFA-Franc. Afrikas letzte Kolonial­währung”, Aus Politik und Zeitgeschichte, 29 April 2022, https:// www.bpb.de/shop/zeitschriften/apuz/geldpolitik-2022/ 507738/der-cfa-franc/ (accessed 5 September 2023).

 Carol Bertaut, Bastian von Beschwitz and Stephanie Curcuru, The International Role of the U.S. Dollar. Post-COVID Edition, FEDS Notes (Washington, D.C.: Board of Governors of the Federal Reserve System, 13 June 2023).

 Tomasz G. Grosse, Monetary Power in Transatlantic Relations. Study of the Relationship between Economic Policy and Geo­politics in the European Union, Natolin Papers 35 (Warsaw: Natolin European Centre, 2009), 98.

 Barry Eichengreen, Exorbitant Privilege. The Rise and Fall of the Dollar (Oxford: Oxford University Press, 2011), 4.

 Benjamin J. Cohen, “The Benefits and Costs of an Inter­national Currency: Getting the Calculus Right”, Open Economic Review 23, no. 1 (2012): 17f.

 Dąbrowski, Increasing the International Role of the Euro (see note 6).

 Joscha Beckmann et al., The International Role of the Euro: State of Play and Economic Significance, Monetary Dialogue Papers (Luxembourg: European Parliament, June 2020), doi: 10.2861/651102; European Commission, Towards a Stronger International Role of the Euro: Commission Contribution to the European Council and the Euro Summit (13–14 December 2018), Brussels, 4 December 2018, 5.

 Benjamin J. Cohen, The Future of Global Currency: The Euro versus the Dollar (London: Routledge, 2012), 17; Andrews, ed., International Monetary Power (see note 2), 20.

 Karina Patrício Ferreira Lima, “Sovereign Solvency as Mone­tary Power”, Journal of International Economic Law 25, no. 3 (2022): 424–46, doi: 10.1093/jiel/jgac029.

 Dąbrowski, Increasing the International Role of the Euro (see note 6), 31.

 Cohen, The Future of Global Currency (see note 40), 19.

 Paweł Tokarski, EZB, Klimawandel und Finanzstabilität: wohin steuert das geldpolitische Engagement? SWP-Studie 20/2021 (Berlin: Stiftung Wissenschaft und Politik, November 2021), doi: 10.18449/2021S20.

 Cohen, The Future of Global Currency (see note 40), 19f.

 Pierre-Olivier Gourinchas and Hélène Rey, Exorbitant Privilege and Exorbitant Duty, Discussion Paper 16944 (London: CEPR, 22 January 2022).

 See, e.g., Daniel McDowell, “The US as ‘Sovereign Inter­national Last-Resort Lender’: The Fed’s Currency Swap Pro­gramme during the Great Panic of 2007–09”, New Political Economy 17, no. 2 (2012): 157–78, doi: 10.1080/13563467. 2010.542235.

 ECB, Central Bank Liquidity Lines (as at December 2022) (Frank­furt, 2023), http://www.ecb.europa.eu/mopo/ implement/liquidity_lines/html/index.en.html (accessed 5 September 2023).

 Cohen, The Future of Global Currency (see note 40), 19–20.

 Ibid.

 Benedicta Marzinotto, “Unity in Diversity? Varieties of Capitalism before and after the Euro Crisis”, in The Political Economy of Adjustment throughout and beyond the Eurozone Crisis. What Have We Learned? ed. Michele Chang, Federico Steinberg and Francisco Torres (London: Routledge, 2019), 207–208.

 Vivien A. Schmidt, Bringing the State Back into the Varieties of Capitalism and Discourse Back into the Explanation of Change, Work­ing Paper 152 (Cambridge, Mass.: Harvard University, Center for European Studies, 2007).

 “General Government Spending”, OECD Data, https:// data.oecd.org/gga/general-government-spending.htm (accessed 6 June 2023).

 Ibid.

 “Kurzinformationen über die europäischen Regionen”, Eurostat, 2021, https://ec.europa.eu/eurostat/de/web/regions/ statistics-illustrated (accessed 6 June 2022).

 Paweł Tokarski, Divergence and Diversity in the Euro Area. The Case of Germany, France and Italy, SWP Research Paper 6/2019 (Berlin: Stiftung Wissenschaft und Politik, May 2019), doi: 10.18449/2019RP06.

 Juan Luis Diaz del Hoyo et al., Real Convergence in the Euro Area: A Long-term Perspective, Occasional Paper Series 203 (Frank­furt: ECB, December 2017).

 Bert Colijn and Carsten Brzeski, “Eurozone Still Set for Divergence despite Fiscal Support”, ING Bank N.V. – Economic and Financial Analysis, 20 April 2021, https://think.ing.com/ downloads/pdf/article/eurozone-still-set-for-divergence-despite-fiscal-support (accessed 24 August 2023).

 Cohen, “The Benefits and Costs of an International Cur­rency” (see note 37), 17–19.

 European Commission, Towards a Stronger International Role of the Euro. Communication from the Commission to the Euro­pean Parliament, the European Council (Euro Summit), the Council, the European Central Bank, the European Economic and Social Com­mittee and the Committee of the Regions, COM(2018) 796 final (Brussels, 5 December 2018), 6.

 Benjamin J. Cohen, “Enlargement and the International Role of the Euro”, Review of International Political Economy 14, no. 5 (2007): 746–73, doi: 10.1080/09692290701642630.

 See, e.g., Marcello Minenna, Giovanna Maria Boi and Paolo Verzella, The Incomplete Currency: The Future of the Euro and Solutions for the Eurozone (New York: John Wiley, 2016); European Commission, The Five Presidents’ Report: Completing Europe’s Economic and Monetary Union (Brussels, 22 June 2015).

 More on this will be presented in the next chapter.

 Kathleen R. McNamara, “A Rivalry in the Making? The Euro and International Monetary Power”, Review of Inter­national Political Economy 15, no. 3 (2008): 439–59 (440), doi: 10.1080/09692290801931347; Randall Germain and Herman Schwartz, “The Political Economy of the Failure: The Euro as an International Currency”, Review of International Political Economy 21, no. 5 (2014): 1095–1122 (1105–09).

 Paul De Ryck, Towards Unified Representation for the Euro Area within the IMF, PE 637.969 (Brussels: European Parlia­ment, European Parliamentary Research Service [EPRS], July 2019).

 Commission of the European Communities, Proposal for a Council Decision on the Representation and Position Taking of the Community at International Level in the Context of Economic and Monetary Union, COM(1998) 637 final (Brussels, 9 November 1998).

 European Commission, The Five Presidents’ Report (see note 62); idem, State of the Union 2018. The Hour of European Sovereignty, Authorised Version of the State of the Union Address 2018 (September 2018).

 European Commission, The Five Presidents’ Report (see note 62).

 Valerie Caton, France and the Politics of the European Eco­nomic and Monetary Union (London: Palgrave Macmillan, 2015).

 Burkhard Balz, Wettbewerb der Währungen – Die Rolle des Euro im internationalen Finanz- und Währungssystem, Abendveranstaltung “Finanzwelt in Europa” Vertretung des Landes Hessen bei der EU (Brussels, 4 November 2019); Jürgen Stark, “The Role of the Euro in the World – Past Developments and Future Per­spectives”, Speech at the Joint Bundesbank/BIS Conference on “Recent Developments in Financial Systems and the Chal­lenges for Economic Policy”, Frankfurt, 28–29 September 2000, https://www.bis.org/review/r001004a.pdf (accessed 5 September 2023).

 Sebastian Dullien, “The German Barrier to a Global Euro”, European Council on Foreign Relations (ECFR), Commen­tary, 30 August 2018.

 European Commission, Implementing the Framework for Financial Markets: Action Plan, COM(1999) 232 final (Brussels, 11 May 1999).

 European Commission, Action Plan on Building a Capital Markets Union, COM(2015) 0468 final (Brussels, 30 September 2015).

 Ibid.

 European Commission, A Capital Markets Union for People and Businesses – New Action Plan, COM(2020) 590 final (Brussels, 24 September 2020).

 Jacopo Borgognone, Between Old and New Challenges: The Role of the Capital Markets Union in Achieving Inclusive and Sus­tainable Growth in Europe (Brussels and Frankfurt: European Banking Federation [EBF], n.d.), https://www.ebf.eu/market-securities/between-old-and-new-challenges-the-role-of-the-capital-markets-union-in-achieving-inclusive-and-sustain able-growth-in-europe/ (accessed 5 September 2023).

 European Court of Auditors, Capital Markets Union – Slow Start towards an Ambitious Goal, Special Report 25/2020 (Lu­xem­bourg, 11 November 2020), 5, https://www.eca. europa.eu/en/publications?did=57011 (accessed 5 September 2023).

 “Who’s Afraid of the Capital Markets Union?” Eurointelli­gence Newsbriefing, 18 April 2023; Huw Jones, “Exchanges and Asset Managers Square off over EU Market Rules”, Reuters, 17 April 2023.

 European Commission, Monitoring Progress towards a Capital Markets Union: A Toolkit of Indicators, SWD(2021) 544, Overview of CMU Indicators – 2022 Update, Commission Staff Working Document (14 July 2022), https://finance.ec. europa.eu/system/files/2022-09/220725-capital-markets-union-indicators_en.pdf (accessed 5 September 2023).

 European Court of Auditors, Capital Markets Union (see note 77), 5.

 Jorge Valero, “Big Euro Economies Push for Strong Cryptocurrency Rules”, Euractiv, 11 September 2020.

 Raphael Auer et al., Central Bank Digital Currencies: Motives, Economic Implications and the Research Frontier, BIS Working Papers 976 (Basel: Bank for International Settle­ments [BIS], November 2021); Lawrence H. White, The World’s First Central Bank Electronic Money Has Come – And Gone: Ecuador, 2014–2018 (Washington, D.C.: Cato Institute, 2 April 2018).

 UK Parliament, Central Bank Digital Currencies: Lords Eco­nomic Affairs Committee Report (London: House of Lords Library, 30 January 2023).

 “Eurosystem Proceeds to Next Phase of Digital Euro Project”, ECB, press release, 18 October 2023.

 Ibid.

 Ignazio Angeloni, The Digital Euro: What We Know and What We Don’t (London: Official Monetary and Financial Institutions Forum [OMFIF], 16 May 2023).

 “Market Share of International and Domestic Payment Card Schemes in 15 Countries in Europe in 2020”, Statista, https://www.statista.com/statistics/1116580/payment-card-scheme-market-share-in-europe-by-country/ (accessed 5 Sep­tember 2023).

 Joachim Nagel, Digitaler Euro – Chancen und Risiken, CFS-IMFS Special Lecture Goethe University (Frankfurt, 11 July 2022), https://www.bundesbank.de/de/presse/reden/digitaler-euro-chancen-und-risiken-894264 (accessed 5 September 2023).

 Regulation (EU) 2023/1114 of the European Parliament and of the Council on Markets in Crypto-assets, and Amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/ EU and (EU) 2019/1937 (31 May 2023).

 Tokarski, EZB, Klimawandel und Finanzstabilität (see note 44).

 Climate Bonds Initiative, https://www.climatebonds.net/ market/data/ (accessed 4 October 2023).

 Agnieszka Smoleńska, “Euro as the Currency of the EU’s Green Transition”, European Law Open, no. 1 (2022): 1048–58, doi: 10.1017/elo.2022.51.

 Eurogroup, Letter of the President of the Eurogroup to the President of the Euro Summit on the International Role of the Euro (19 March 2021), https://www.consilium.europa.eu/de/press/ press-releases/2021/03/22/international-role-of-the-euro-president-donohoe-s-report-to-the-president-of-the-euro-summit/ (accessed 5 September 2023).

 See, e.g., Robin Wigglesworth, “Dollar :-(. The Green­back Might Now Account for Less Than Half of Global Reserves”, Alphaville (Financial Times Blog), 19 April 2023; George Magnus, “Dollar :-). Turn that Frown Upside Down”, Alphaville (Financial Times Blog), 21 April 2023; Daniel McDowell, “Financial Sanctions and Political Risk in the International Currency System”, Review of International Politi­cal Economy 28, no. 3 (2021): 635–61, doi: 10.1080/09692290. 2020.1736126.

 Zoltan Pozsar, “Great Power Conflict Puts the Dollar’s Exorbitant Privilege under Threat”, Financial Times, 20 Janu­ary 2023.

 Weiss, Geopolitics and the U.S. Dollar’s Future as a Reserve Cur­rency (see note 9), 2.

 See, e.g., Michael Lebowitz, “Four Reasons the Dollar Is Here to Stay”, Investing.com, 19 April 2023, https://www. investing.com/analysis/4-reasons-us-dollar-is-here-to-stay-200637344 (accessed 21 September 2023).

 Colby Smith, “The Belt and Road’s Dollar Problem”, Alphaville (Financial Times Blog), 18 December 2018.

 Shivangi Acharya, Aftab Ahmed and Neha Arora, “Exclusive: India to Discourage Foreign Trade Settlement in Chinese Yuan”, Reuters, 13 March 2023.

 “China Restricts Overseas Access to Key Corporate Information”, Bloomberg, 3 May 2023, https://www.bloom berg.com/news/articles/2023-05-03/china-restricts-overseas-access-to-corporate-registry-databases?sref=mPFALO8o (accessed 5 September 2023).

 Alain Naef et al., “The Renminbi’s Unconventional Route to Reserve Currency Status”, CEPR, Voxeu Column (on­line), 31 October 2022.

 Michael Stott and Lucinda Elliott, “Brazil and Argentina to Start Preparations for a Common Currency”, Financial Times, 22 January 2023.

 Marcus Ashworth, “The Dollar Will Vanquish Pretend­ers to Its Throne”, Bloomberg, 26 January 2023.

 Hanns Günther Hilpert, Bettina Rudloff and Paweł Tokarski, “Covid-19 und die Weltwirtschaft: Herausforde­rungen für Deutschland und Europa”, in Internationale Politik unter Pandemie Bedingungen. Tendenzen und Perspektiven für 2021, ed. Barbara Lippert, Stefan Mair and Volker Perthes (Berlin: Stiftung Wissenschaft und Politik, December 2020), 15–19, doi: 10.18449/2020S26.

 Adriaan Schout, “The Paradox of a Stronger Global Role for the Euro”, Clingendael Magazine, 9 February 2023.

 Marco Cipriani, Linda S. Goldberg and Gabriele La Spada, “Financial Sanctions, SWIFT, and the Architecture of the International Payment System”, Journal of Economic Perspectives 37, no. 1 (Winter 2023): 31–52, doi: 10.1257/ jep.37.1.31.

 “Swift Explores Blockchain Interoperability to Remove Friction from Tokenised Asset Settlement”, SWIFT (online), 6 June 2023.

 Bank for International Settlements, Annual Economic Report, June 2023, https://www.bis.org/publ/arpdf/ar2023e. htm (online).