Eurozone Central Bank officials: The euro is not yet ready to challenge the dollar’s status.

Cailian Press, July 6th (Editor: Xia Junxiong)
Gabriel Makhlouf, a member of the European Central Bank’s management committee and Governor of the Irish Central Bank, stated that there is still a long way to go for Eurozone countries in terms of financial and economic integration, hence the euro cannot quickly replace the dollar as the anchor currency of the global financial system.
During an economic conference held in Aix-en-Provence, France, Makhlouf mentioned that in the long run, the dominance of the dollar will weaken, but Europe currently does not possess “safe assets” like U.S. Treasury bonds backed by a unified fiscal capacity.
“Frankly speaking, the economic system of Europe is not yet formed,” Makhlouf said.
He added that the recent appreciation of the euro against the dollar is more due to investors’ concerns about the legal framework in the United States.
Due to President Trump’s unpredictable economic, trade, and security policies, there has been doubt about the future of the dollar, which depreciated by more than 10% in the first half of the year, the largest depreciation since 1973.
As the biggest beneficiary of the dollar’s depreciation, the euro-dollar exchange rate has now reached 1.18%, with an annual increase of about 14%.
Makhlouf expressed, “Claiming that this will lead to the euro rapidly replacing the dollar is somewhat overstated, as the euro is not yet ready for such a step.”
The dollar’s share in global reserves has dropped to its lowest point in decades, but its 58% share remains significantly higher than the second-placed euro, which accounts for 20%.
Nevertheless, Makhlouf echoed the views of other officials at the European Central Bank, calling on Europe to leverage the current situation of global uncertainty to strengthen its own security, break down barriers within the single market, and increase joint financing for common goals.
“These opportunities to enhance the position of the EU, strengthen its sovereignty and autonomy are crucial and must be seized,” Makhlouf stated.
At the annual central bank meeting in Sintra, Portugal, several governors of central banks indicated that the status of the dollar as the world’s preferred reserve currency would not face significant challenges in the short term.
Jean-Claude Trichet, President of the European Central Bank, believes that if the Eurozone can implement necessary reforms, the euro may gradually become an alternative to the dollar in the future, but this will require tremendous effort and a long time.