On European fragmentation and the single currency in an uncertain world | EIQ Discussion Paper

Ignazio Visco has authored a new paper for the Europe in Question Discussion Paper Series at the European Institute, which argues that to strengthen its economic and geopolitical standing, the EU must first address demographic, technological and market challenges through coherent reforms and clearer communication, while promoting openness and managing the social impacts of change.

Abstract

"Europe, and especially the European Union, faces major challenges from the policies of the second Trump administration, which affect not only trade but also energy, defence, digital services and payments. Uncertainty around US decisions has raised questions about the stability of the international monetary system and the future role of the dollar, prompting some to argue that the EU could strengthen its geopolitical position and even elevate the euro as a full international reserve currency. Yet institutional and market fragmentation and heterogenous legal frameworks limit such prospects. To strengthen its economic and geopolitical standing, the EU must first address demographic, technological and market challenges through coherent reforms and clearer communication, while promoting openness and managing the social impacts of change."