Frankfurt (Reuters) – Europe must act quickly to strengthen the role of the euro in the world and its leaders must work to extend links with the countries most affected by American customs duties, pleaded François Villeroy de Galhau, governor of the Banque de France (BDF) and member of the Central Bank (BCE) on Thursday.

Donald Trump’s economic policy has shaken investors’ confidence in the dollar since the start of the year without allowing the euro to position themselves as an alternative to the greenback.

The monetary block has certainly taken measures, but these are deemed too slow to implement due to indecision, discord and bureaucracy.

Sketching a series of possible measures, François Villeroy de Galhau declared that time is running out and that it was crucial that Europe fixes a deadline, for example on January 1, 2028, to implement the expected changes.

“If we do not react quickly, we seriously risk seeing the opportunity window closing,” said François Villeroy de Galhau, during a speech in Luxembourg.

The European single currency could see its role increase in the world if the block invoiced a larger part of its foreign trade in euros, he explained. According to him, there is an opportunity to do so with countries particularly affected by American trade policy.

“We could take advantage of the EU negotiations with trade partners who have been hit hard by the new American protectionist measures, for example India, Switzerland, Indonesia,” said François Villeroy de Galhau.

To support these exchanges, the ECB could further extend the availability of liquidity lines in euros to central banks outside the euro zone.

This process could be further strengthened if the ECB was finally able to issue a digital currency, according to François Villeroy de Galhau.

The Governor of BDF is also favorable to an extension of the automated tranceuropéese express transfers system with gross regulation in real time, known as Target (Trans-European Automated Real-Time Large Express Transfer System), to country currencies like India, Switzerland, the United Kingdom, Canada or Brazil.

This payment system allows European Union banks to transfer funds in real time throughout the Bloc territory.

Another element that prevents the euro from competing with the dollar is its liquid and safe asset character. Europe could remedy it by merging the existing supranational debts and transforming the existing sovereign debts into true instruments of European sovereign debt, suggested François Villeroy de Galhau.

In the other measures to strengthen the status of the euro, the Governor of the BDF cited the strengthening of venture capital, the creation of a framework of European outcovering for investment funds and the creation of a new pan-European legal and regulatory regime to which companies could adhere, thus replacing national schemes, deemed heavy and fragmented.

(Balazs Koranyi report; Claude Chendjou, edited by Kate Entringer)

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