Christine Lagarde, head of the European Central Bank, said Monday in Berlin that the ongoing chaos in Washington under President Donald Trump is handing Europe a “prime opportunity” to push the Euro into the spotlight and start taking power from the US dollar.
“This is a prime opportunity for Europe to take greater control of its own destiny,” Christine told her audience, adding that “this is not a privilege that will simply be given to us. We have to earn it.”
Her comments were made during a speech that, according to Bloomberg, laid out how Trump’s unpredictable economic behavior is creating the perfect opening for Europe to elevate the Euro as a global currency.
Christine said that if EU governments finally sort out long-standing issues blocking the bloc’s economic potential, they could get rewarded with better access to finance, less exposure to wild currency swings, and protection from foreign sanctions.
The message was simple: stop dragging your feet or miss your chance. She pointed out that the Euro has already gained ground “in a period of uncertainty when we should normally have seen the dollar appreciate significantly,” citing a flight of investors from the dollar as confidence in the US economy erodes under Trump’s leadership.
Lagarde says Trump is driving investors away from the dollar
The warning signs are everywhere. Christine recalled how in the 1970s, Richard Nixon suspended the dollar’s convertibility to gold, a moment that could’ve hurt the dollar’s global dominance if there had been a viable alternative. Now, in 2025, she says there is one: the Euro.
“Today, there’s the euro — another international currency alongside the dollar,” Christine said. And this time, financial markets are already reacting. She described the Euro’s strength as “counterintuitive” but completely logical, given the current disarray in US policy and the steady deterioration in investor trust.
Christine laid out three conditions Europe must meet if the Euro is going to step into a more dominant role. First, she called for a “solid and credible geopolitical foundation” by defending open trade and pairing it with strong security commitments.
Second, she repeated her long-standing push for economic reform within the EU: build the single market, cut down regulations, support startups, and finish the savings and investment union that’s been in limbo for years.
Last, she insisted on more joint European financing, especially for defense. “Economic logic tells us that public goods need to be jointly financed,” she said. If that happens, investors will have a bigger pool of safe assets to choose from — a requirement for any serious reserve currency.
ECB officials say the euro must be backed by real integration
Christine isn’t the only one at the ECB pushing this. Luis de Guindos, the bank’s vice president, also said the Euro could rival the dollar if Europe ramps up integration.
Isabel Schnabel, another executive board member, said Europe now has “a historic opportunity to further strengthen the international role of the euro.” Both officials echoed Christine’s demand for a much larger European bond market to support the Euro’s reserve role.
In her speech and a follow-up interview published Saturday, Christine said the chaos in the US — from attacks on the Federal Reserve’s independence to rising questions around the country’s legal system and trade policies — is making Europe look like the more stable option.
“At a time when we see the rule of law, the judicial system, and trade rules being called into question in the US, where uncertainty is permanent and renewed daily, Europe is rightly perceived as a stable economic and political area, with a sound currency and an independent central bank,” said Christine.
She also pointed to new developments like the digital euro and the single capital market, saying there’s “a groundswell more powerful than anything I’ve seen in six years in office.” Christine made it clear that achieving real harmonization of supervision, just like the EU did with banking regulation, is now essential if Europe wants the Euro to be taken seriously on the world stage.
Christine ended her comments with a direct shot at Trump’s repeated attacks on the Fed. “The independence of the central bank is fundamental to monetary and financial hygiene within a country or group of countries,” she said. “In every case where a central bank has found itself under the thumb of a fiscal authority, it has never ended well.”
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