klaus liebscher : prospects for the international role of the euro speech by dr klaus liebscher, governor of the austrian national bank, at the salzburg seminar “ challenges to the international monetary system ”, salzburg, 1 october 2007. * * * ladies and gentlemen! let me begin by thanking the organizers for inviting me to share with you my views on the “ prospects for the international role of the euro ” in this marvelous and historic venue. i have accepted the invitation with pleasure. since the introduction of the single currency, the eurosystem, i. e. the ecb and the national central banks of the euro area, was always of the opinion that the international use of the euro should neither be promoted nor hindered. it has taken a neutral stance and has left it to the market forces to determine the role of the euro as an international currency. to the extent that the eurosystem has been successful in maintaining price stability, this in itself has fostered the use of the euro as an international currency. eight and a half years after its introduction, the euro has now established itself firmly as the second world currency. nearly one - third of all international debt securities are denominated in euro, and the euro accounts for more than 25 % of global foreign exchange reserves. moreover, with 646 billion banknotes and coins in circulation, the euro has already overtaken the us dollar. 1 in international foreign exchange markets, the us - dollar has retained its dominant role, however the euro has established itself as the second most often traded currency. notwithstanding its neutral stance, the ecb and the eurosystem are following developments closely. since 2001, the ecb has been publishing its so - called “ review of the international role of the euro ” on a regular basis. this review provides a detailed description of the euro ’ s use in the various segments of financial markets and in international trade. the latest “ review of the international role of the euro ”, published in june 2007, reports that recent developments in the international use of the euro vary across global market segments. while the international role of the euro has lessened slightly in some segments, namely international debt securities, international deposits and loans as well as foreign exchange, in other segments it has continued to be highly stable or even to grow gradually. in particular, the use of the euro as a reserve currency by third countries has increased somewhat. moreover, demand for euro banknotes and for euro - denominated deposits by private agents

financial integration. in 2017, the european economy grew at its fastest rate in 10 years and for the first time since 2007, all member states saw their economies expand. for 2018, gdp growth is expected to remain strong, based on strong private consumption as well as increased investment and exports, and unemployment rates are receding toward pre - crisis levels. robust growth helps both further reduce government deficit and debt levels and improve labor market conditions. “ the wind is back in europe ’ s sails. but we will go nowhere unless we catch that wind, ” as president juncker said in his 2017 state of the union address. we can use the current good times to make our economies more resilient. this means building fiscal buffers and implementing further economic reforms to strengthen the foundations of our economic and monetary union. we have already made great strides in making its architecture more robust, but it is still not complete. further work lies ahead to make sure that the benefits of emu reach all eu citizens. the date of this year ’ s economics conference was not chosen randomly. the beginning of july coincides with the start of the austrian eu presidency in the second half of 2018. after 1998 and 2006, this is now the third time that austria is holding the presidency of the council of the european union. this time, the presidency faces major challenges including • the brexit negotiations with the u. k., • the debates on the multi - annual financial framework, • progress in completing banking union, • the implementation of the european security and migration agenda, • the fight against terrorism, and • the debate on the future of the european union. the austrian eu presidency takes place at a politically sensitive time as the european parliament ’ s legislative period ends in 2019. important dossiers have to be finalized before the european elections in spring 2019. for the european union as a whole, the euro is a symbol of a peaceful europe, a keystone of economic integration and political unity. for the world, the euro has become a major player in the international monetary system and the second most important global currency. the single currency rests on a common monetary policy, where the governing council of the ecb can and must only target the euro area aggregate when taking monetary policy decisions. in mid - 2012, mario draghi ’ s statement that the ecb is ready to do “ whatever it takes to preserve the euro, ” within our mandate undoubtedly reestablished confidence in sovereign bonds. in response to the crisis, the eu moreover