EU finance ministers met in Brussels on Monday (16 February) to push for a stronger role for the euro currency.
“In light of recent geopolitical events, risks have materialised that the financial and monetary system is being used as a political tool,” said Greek finance minister Kyriakos Pierrakakis, who chaired the meeting.
“It is existential for us to safeguard the international role of the euro as it is quite pertinent for the EU’s monetary sovereignty.”
The EU Commission, in a 30-page document prepared ahead of the meeting similarly warned that global trade and capital flows are “increasingly fragmented along geopolitical lines” and that “trade barriers and financial sanctions are increasingly used as geopolitical tools”, a reference to Trump’s April 2025 trade war announcement.
One of the goals, according to EU economy commissioner Valdis Dombrovskis (whose team oversaw the report), was to identify “obstacles” to wider euro adoption.
The euro currency is “punching below its weight” in several neighbouring regions, given the EU’s role as their main trade and investment partner, the paper says.
The US currency accounts for about 60 percent of global goods exports, compared to roughly 25 percent for the euro.
The paper urges EU capitals to “engage with key sectors such as transport, energy, raw materials, and defence to strengthen the role of the euro in procurement, invoicing, pricing and payments” and increase the number of contracts signed in euros as opposed to dollars.
A greater share of energy imports priced in euros would shield European firms from exchange rate swings and reduce their need to scramble for dollar liquidity in times of crisis, and reduce dependence on US financial plumbing.
Euro liquidity
The discussion comes days after the European Central Bank revamped its euro liquidity facilities, widening access for non-euro area central banks
By making it easier for foreign central banks to tap euro funding in stressed markets, Frankfurt is trying to make the currency more attractive as a reserve and transaction tool.
“As geopolitical tensions rise….financial market stress is likely to become more frequent,” ECB president Christine Lagarde said at the Munich Security Conference last week.
“The availability of a lender of last resort for central banks worldwide boosts confidence to invest, borrow and trade in euros,” she also said.
Eurobonds
The paper floats the possibility of bringing more EU-level bond issuance [eurobonds] under a single entity and continuing common borrowing to finance projects with “clear EU value added”.
Since 2020, the EU has become the third-largest issuer of AAA-rated public debt globally, giving investors a growing pool of euro-denominated securities.
“The global market is increasingly wary of the American greenback [dollar]. It’s looking for alternatives. Let’s offer it European debt,” French president Emmanuel Macron told reporters last week ahead of an informal council in Antwerp, later calling it “a great idea” at the Munich Security Conference.
Bundesbank chief Joachim Nagel has similarly urged the EU to issue more joint debt, breaking from Germany’s traditional opposition to eurobonds.
German chancellor Friedrich Merz, however, remains firmly against it: “I cannot agree to financing EU projects through eurobonds.”
On Monday, ministers did not raise the subject at arrival.
Single Market
EU finance ministers from the six largest member states — the so-called E6 group of France, Germany, Italy, the Netherlands, Poland, and Spain— also held their second meeting on Monday to advance the single market.
The smaller group was formed to push lagging members to give up more than a decade of opposition.
“Today we met our Dutch, Polish, Spanish, and Italian colleagues, and we want to move forward together,” the French finance minister said. “We hope to act as a spur for the rest of the EU. Europe often moves forward well, but sometimes not quickly enough.”
One stumbling block is centralised financial supervision.
Ireland — previously described by the EU Parliament and EU-funded researchers as tax haven—sounded less enthusiastic.
“We should always ask what the benefit is and what the cost will be. We believe we have very strong supervision,” said the Irish deputy finance minister Simon Harris.
“We don’t want to add to paralysis here; we believe there is a landing zone,” he added, not wanting to close the door to compromise completely. “But we believe the EU is strongest” when “all 27 member states” agree, he said.
The commission aims to harmonise the EU’s 27 capital markets by the end of next year.