General

Recently, the European Union has been calling for the promotion of the internationalization of the euro. In particular, France, as one of the "two carriages" of the European Union, is more active on the issue of strengthening the international status of the euro.

u3000u3000 During the EU summit held in late October, French President Macron publicly declared that the internationalization of the euro must be accelerated so that the EU will not be subject to the “long-arm jurisdiction” of the US dollar.

u3000u3000Europe internationalization France is the most active

u3000u3000 A few days ago, the United States, Britain, and Australia announced the establishment of the so-called "trilateral security partnership." Australia unilaterally tore up the large submarine order signed with France. France-Australia relations and the trust between France and its allies fell into crisis.

u3000u3000 Recently, France has shown a tough side to its American allies. After the two-day EU summit in late October, French President Macron stated that the euro is an important policy tool and that the EU should further promote the internationalization of the euro to protect EU companies from the "long-term" imposed by the United States through the US dollar and American standards. Jurisdiction". Macron also said that the internationalization of the euro is also related to its position in the EU's financial integration process.

u3000u3000 As early as January this year, the European Commission announced a strategic document aimed at strengthening the status of the euro and the construction of the financial system. The European Commission proposed that on the basis of the in-depth construction of the European Banking Union and the Capital Market Union, it is necessary to increase debt securities, energy and commodity transactions settled in euros, develop digital euros as a supplement to cash payments, and issue green bonds for large-scale investments. project financing. At that time, some public opinion believed that this move was directed at the hegemony of the US dollar and the unilateral extraterritorial sanctions by the United States.

"The European Union has always been discussing the promotion of the internationalization of the euro. France is particularly active because some French companies and banks have been sanctioned by the United States' "long arm jurisdiction"." The reporter pointed out in an interview that the last US administration unilaterally withdrew from the Iran nuclear agreement, which made France and other EU member states further realize the importance of strengthening the euro’s international status, hoping to enhance the euro’s settlement capability as an international currency in response to the use of the US dollar by the United States. Hegemony implements "long-arm jurisdiction."

u3000u3000 In 2018, the United States withdrew from the Iran nuclear agreement, restarted and increased sanctions against Iran. This move poses a serious threat to European companies doing business in Iran, especially European companies that use U.S. dollar settlement in their business or raise funds in the United States. To this end, France, Germany, and the United Kingdom established an INSTEX settlement mechanism for trade with Iran in 2019 to help European companies bypass US sanctions against Iran and enable the EU to continue trading with Iran.

“France will assume the rotating presidency of the European Union from January 2022 and will focus on promoting European strategic autonomy, and strengthening the euro’s international status is one of the important elements. In addition, the current US government has stated that it will conditionally return to the Iran nuclear agreement. France is worried that the EU's impetus to strengthen the international status of the euro may be weakened due to the easing of external pressures, so it has recently reiterated its emphasis on promoting the internationalization of the euro," said Cui Hongjian.

u3000u3000U.S. "Long Arm Jurisdiction" Damaged European Interests

"For a long time, the hegemony of the U.S. dollar has given the U.S. a special advantage in the game with Europe. With the U.S. dollar's dominance in the international financial system, the U.S. has issued sky-high fines to many banks in France and Germany for participating in money laundering. As long as the US dollar is used, it will be controlled by the United States and cannot escape the "long-arm jurisdiction" of the United States. For this reason, European countries and the European Union have always hoped to get rid of the dollar control." Ding Yifan, a researcher at the World Development Institute of the Development Research Center of the State Council, pointed out to our reporter, Since its birth, the euro has been in competition with the US dollar. Behind international events such as the Iraq War and the negotiations on the Iranian nuclear agreement, there are shadows of the game between the US dollar and the euro.

u3000u3000 "At present, the US fiscal situation is deteriorating, the credit system is facing more and more doubts, and the dollar is weakening. This allows the EU to see an opportunity to promote the internationalization of the euro." Ding Yifan said.

u3000u3000 International Monetary Fund data show that since the birth of the euro, the proportion of US dollar assets in the global central bank's foreign exchange reserves has dropped from 71% to 59% in the fourth quarter of 2020, the lowest level in 25 years. During this period, the proportion of euro assets remained at about 20%, and the proportion of other currency assets such as renminbi rose to about 9%. Some analysts pointed out that central banks are gradually reducing their holdings of US dollars.

"In the past, European politicians rarely took the initiative to publicly call for the strengthening of the euro’s international status. They believed that this was a natural result of promoting European integration. However, in recent years, on the one hand, it has been affected by the 2008 financial crisis and the subsequent European debt crisis. The importance of advancing European integration and strengthening European economic resilience has become more prominent; on the other hand, European-American relations have experienced huge fluctuations in recent years. The United States has continuously used economic policy tools to exert pressure on the European Union, making the European Union realize that it must strengthen the euro’s international status. This will offset the damage caused by the U.S.’s use of dollar hegemony to the European economy.” Zhao Ke, an associate professor at the International Strategic Research Institute of the Central Party School of the Communist Party of China, pointed out to this newspaper that after World War II, European countries have long faced negative spillover effects caused by the hegemony of the U.S. dollar. The birth of the euro itself is Europe. A result of de-dollarization of the unified market. In recent years, the European Central Bank and the European Commission have further realized that it is necessary to strengthen the international status of the euro.

u3000u3000 Guntram Wolf, director of the Bruegel Institute in Belgium, wrote an article that the European Central Bank's attitude towards the internationalization of the euro is changing. He pointed out that the European Central Bank has neither promoted nor hindered the internationalization of the euro for a long time, and mainly let market forces determine its fate. However, in recent years, the United States has ceased to adhere to multilateralism and has repeatedly used currency hegemony to introduce unilateral sanctions, forcing EU companies to cut off ties with Cuba, Iran and other countries. Now, Europe is reconsidering its position on currency issues and is beginning to think about how to actively promote the internationalization of the euro to ensure the autonomy of European diplomacy and economic and trade activities.

u3000u3000Diplomatic security goals depend on euro support

In July 2020, after many rounds of negotiations and coordination of differences, the European Union finally reached a 750 billion euro "European Recovery Fund", which supports member states to develop green economies through direct assistance and euro loans, and promotes digital transformation. The fiscal situation adopts a differentiated economic recovery plan to guide member states to focus on economic restoration, green transformation and accelerating digitalization.

u3000u3000 In June of this year, the European Central Bank released its annual report on the international role of the euro, stating that strengthening the construction of the European Economic and Monetary Union will help consolidate the international status of the euro. The creation of a digital euro makes it easier to pay or save, thereby further enhancing the international status of the euro.

"The'European Recovery Fund' is a substantial step taken by the European Union in the process of fiscal integration. Its establishment and operation are likely to create a safe asset denominated in euros, which will help make up for the lack of sovereign credit support in the euro. The board plays a boosting role in advancing the internationalization of the euro.” Zhao Ke pointed out that the EU will continue to strengthen the euro’s international status from at least three aspects: First, as an important buyer of international commodities such as oil and natural gas, it will promote Commodities are settled in euros; the second is to promote the use of euros for pricing and settlement of products that have a dominant position in Europe such as airplanes and automobiles; the third is to promote the use of euros in third-party markets through intergovernmental agreements.

u3000u3000 In September 2018, when former European Commission President Juncker delivered his "Alliance Address" for the last time during his tenure, he also called for the promotion of the euro's international status. Juncker bluntly said that Europe imports 300 billion euros worth of energy each year. Although only 2% of it comes from the United States, the European Union pays 80% of its energy import bills in US dollars. At the same time, the purchase of European-made aircraft by European companies is also settled in U.S. dollars. These are all absurd.

"The U.S.'s use of U.S. dollar hegemony to implement'long-arm jurisdiction' is not only a financial issue, but also involves diplomacy and economic security. The United States has long abused financial hegemony, forcing many countries to adopt local currency swaps and barter trade to counter it. As a result, the settlement capacity of the U.S. dollar will decline.” Cui Hongjian pointed out that the contemporary international strategic landscape is developing towards multi-polarity, and one of the manifestations is the decline in the hegemony of the United States. As the most important manifestation of U.S. financial hegemony, the status of the U.S. dollar is correspondingly weakened. In this context, the EU will more actively establish close economic and trade relations with other markets, and settle settlements in euros with certain targets within a certain range, so as to steadily enhance the international status of the euro and better support the EU's future diplomacy, security, etc. Level goals.

u3000u3000 Ding Yifan pointed out that it should be noted that the financial markets of the United States and Europe are closely linked. In the event of an economic crisis in the United States, European countries may become victims. Therefore, while advancing the process of euro internationalization, the EU must further promote the process of fiscal integration to enhance the stability of the euro itself.