Debate: Strengthening the international role of the euro
Date: WEDNESDAY, 24 MARCH 2021
Speaker: Virginijus Sinkevičius
Language: EN

As your report rightly points out, we have indeed witnessed an increasingly multipolar, geopolitical context over the last years. But the EU has the capacity to help shape the system of global economic governance. The EU has remained open to the rest of the world and continues to advocate for a rule—based multilateral system with well-functioning international financial markets and a more resilient and open global economy. In order to continue enjoying the benefits of our openness we have to make our economic and financial system even stronger and more resilient. For this purpose, the Commission set out a dedicated strategy. The first key action that we set out in our communication is to further deepen economic and monetary union. Your valuable report attaches great importance to strengthening our domestic capital market. Indeed, completing banking union and making further significant progress on capital markets union are immediate steps to take. As you noted, we also need to ensure the swift and ambitious implementation of the reforms and investments embedded in the Recovery and Resilience Facility to make the economy more resilient and inclusive, and a sustainable recovery and enhance economic resilience are preconditions for a strong international role of Europe. We fully agree with you that the sizable issuance of euro-denominated bonds to finance Next Generation EU will help achieve these objectives. These bonds will add depth and liquidity to the debt securities market denominated in euro.  Next to this, the EU also needs to pursue other more targeted actions to strengthen the international role of the euro. This includes fostering the use of the euro in trade and in financial instruments, as well as in energy markets, consolidating the leading role of the euro as a denomination currency of sustainable finance products, conducting outreach to third-country partners to encourage a wider use of the euro, and cooperating with the ECB on the possible introduction of a digital euro.  The second area of targeted action is on financial market infrastructures. We need to make sure that we are not over-reliant on third-country infrastructure, as the EU needs to be able to control potential risks to financial stability. We will also work to secure the uninterrupted flow of essential financial services between the EU and its trading partners, and to shield the legitimate operations of EU operators targeted by the extraterritorial application of third-country sanctions. The last pillar of our strategy relates to our sanctions policy. Our institutions share the same approach. First, we need to ensure the uniform and effective implementation of EU sanctions across Member States. In this regard we propose to better coordinate Member States’ authorities and increase the flow of information among them and the Commission. Second, we need to continue to agree on legally binding provisions with partners implementing EU funds to ensure that EU funds and economic resources are not used in violation of EU sanctions. And third, we need to continue our work in promoting new and more effective tools to counter the extraterritorial application of non-EU sanctions. In parallel, we will continue with dialogue and cooperation with our international partners on sanctions which we believe is the most effective way of strengthening our sanctions policy and reducing the nefarious effects of the extraterritorial application of third-country sanctions. The areas of action that we are discussing today are of course interconnected and mutually reinforcing. We count on your support in carrying this work forward. The euro is the currency of the Union. But it is more than just a currency. It’s a symbol of unity and prosperity of Europeans. The euro is an attractive currency. That is also demonstrated by the efforts that Bulgaria and Croatia are making towards the adopting the euro. Last summer the two countries joined ERM II. The Commission counts on the European Parliament’s cooperation in supporting Bulgaria and Croatia on the road to joining the euro area once the criteria are met.