ECB’s Makhlouf says euro not ready to challenge dollar’s role

Finance·euro zoneECB’s Makhlouf says euro not ready to challenge dollar’s roleBY William HorobinBY BloombergBY William HorobinBY BloombergThe euro's recent rise against the dollar is more attributable to investor concerns the rule of law in the US, Gabriel Makhlouf said

Getty ImagesThe euro cannot quickly supplant the dollar as the anchor of the world’s financial system as countries using it still have far to go in their financial and economic integration, European Central Bank Governing Council member Gabriel Makhlouf said

The Central Bank of Ireland Governor said dollar dominance will decline over the long-term, but for now Europe lacks a single fiscal capacity of a safe asset Treasuries that would mirror the US system. “Frankly, Europe’s economic system is still not formed,” Makhlouf said at an economic conference in Aix-en-vence, France

Currency movements in recent months, which have seen the euro appreciate against the dollar, are more attributable to investor concerns the rule of law in the US, he added. “It’s a bit far to say that’s suddenly going to lead to the euro replacing the dollar because the euro is not ready to do that,” Makhlouf said

Still, he echoed the calls of his colleagues at the ECB for Europe to use the current environment of global uncertainty as an opportunity to bolster its own security, lift barriers within its single market and increase joint-financing for d objectives. “These opportunities to actually increase the standing of the EU, to strengthen its sovereignty and autonomy matter, and they need to be taken,” Makhlouf said

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