Seoul Gazette - Euro Challenges Dollar's Reign

In recent years, the US Dollar's position as the world's primary reserve currency has been unchallenged. However, a growing narrative from European leaders suggests that the Euro could potentially dethrone the Dollar. French President Emmanuel Macron has been vocal about his belief that the Euro can replace the Dollar as the global currency, a sentiment echoed by other European officials.

The Eurozone, as the world's second-largest economy, provides a substantial economic foundation for the Euro. The currency is already the second most used in international trade and finance, and in some contexts, such as global goods trade excluding the EU, it has even surpassed the Dollar. Furthermore, plans for a Digital Euro, as discussed by Christine Lagarde, aim to enhance the currency's global role and reduce dependence on Dollar-centric systems like SWIFT, Visa, and Mastercard.

Despite these ambitions, the Euro faces significant obstacles. The Eurozone's lack of fiscal unity and fragmented banking system undermine its stability, making it vulnerable to crises. In contrast, the US-Dollar benefits from the United States' unmatched military power, deep and liquid capital markets, and its central role in global trade networks. Historical attempts to challenge the Dollar's dominance have failed, and the Euro's structural weaknesses suggest it may not be a viable successor.

While the Euro has made notable progress in becoming a more prominent global currency, its path to replacing the Dollar is fraught with challenges. The Dollar's entrenched position and the Eurozone's internal issues present significant barriers. Nonetheless, ongoing geopolitical and economic shifts could create opportunities for the Euro to gain further ground in the future.