The euro has all chances to compete with the US dollar for the title of the world’s dominant reserve currency. Since its introduction, the euro has been quite stable and gained confidence of most investors. Moreover, in recent years, the US dollar’s dynamic has been causing a lot of concerns. However, the single currency also has some problems that stand in the way of becoming the world’s dominant reserve currency. The fact is that for a long period of time, the EU leaders cannot come to an agreement on their fiscal policy. This, in turn, could significantly support the upgrading of the euro to the reserve currency status.
Ulrich Leuchtmann, an expert at Commerzbank, supposes that closer coordination of fiscal policies in Europe may stabilize the eurozone economic situation and extend the euro’s appeal. In the near future, the EU leaders will meet to discuss the European Commission's post-pandemic recovery fund in order to settle disagreements on some issues of the plan. They are also expected to tackle fiscal policy issues.
