The European Parliament begins to rethink the euro’s global role

On Tuesday 15 September 2026, the European Parliament (EP) adopted its own-initiative report on the global role of the euro with 405 votes in favour, 146 against and 60 abstentions. This is more than a report on expanding the euro’s use outside of the euro-area. It’s the EP finally calling for a more ambitious vision for Europe’s role in shaping the International Monetary and Financial System.

The report comes as the internationalisation of the euro has moved firmly onto the Brussels agenda, especially after Christine Lagarde called for a “global euro moment” in June 2025. Since then, debate has focused on the benefits and trade-offs of a stronger international role for the euro: lower financing and transaction costs and greater policy autonomy, alongside risks such as appreciation pressures, more volatile capital flows and greater international responsibilities.

Yet, some crucial questions have often been missing: what kind of International Monetary and Financial System does Europe want to help build? What would a stronger euro mean for that system as a whole? And how can Europe address long-standing global inequalities rather than reproduce them?

Over the past months, we at Positive Money Europe have engaged with Members of the EP to raise these questions and put forward possible answers. The adoption of this report is a small yet important advocacy milestone for us, as it openly calls for a more sustainable, balanced International Monetary and Financial System and advances practical steps in this direction. 

The report does not go all the way, but it pushes the debate in a more ambitious direction.

Towards a more sustainable International Monetary and Financial System

The report calls on the EU to promote “a more balanced, sustainable and resilient international monetary and financial system”.

The International Monetary and Financial System is the set of rules, institutions and markets that determine how money and finance move across borders. Today, this system is far from balanced, sustainable or resilient, because of significant asymmetries between issuers of major international currencies and countries that depend heavily on them. These constraints tend to affect many countries in the Global South particularly strongly.

Monetary hierarchies are a key feature of this asymmetry. One way to picture this is as a pyramid: the US dollar sits at the top, followed by the euro, with currencies such as the yen and pound also playing important international roles and Global South currencies occupy the lower levels.

A currency’s place in this hierarchy depends on how widely it is accepted internationally, how much it is used in trade and finance, and how reliably it functions as a store of value and reserve asset.

For countries issuing dominant currencies, this creates very important benefits: strong demand for their assets helps lower borrowing costs and gives policymakers greater room to manoeuvre. For the US, issuer of the key-currency of the world, the benefits are even stronger, configuring what Valéry Giscard d'Estaing called “exorbitant privilege”.

Global South countries further down the pyramid face the opposite problem, subject to a “compulsory duty” to obtain dollars to pay for essential imports and service dollar-denominated debts.

These countries also accumulate foreign-exchange reserves as buffers against external shocks and capital outflows, to support exchange-rate stability and to maintain confidence in their ability to meet foreign-currency obligations. During global shocks, these vulnerabilities can become even more severe, as countries face rising import prices, currency depreciation and capital outflows at the same time. 

These pressures can push countries towards economic strategies that are both financially restrictive and environmentally damaging, limiting their ability to invest in development and respond to challenges such as climate change. 

The current system is not only unequal, but also fragile. When the global economy depends heavily on one currency and one financial system, the instability (or weaponisation) of the US financial markets can quickly become a global problem and a EU-problem. 

That is why an important element of the Parliament’s report is its support for a stronger euro “within a more multipolar international monetary system”.

This recognises that today’s currency hierarchy is not inevitable. A more multipolar multi-currency system could reduce excessive dependence on a single dominant currency, benefiting both Global South economies and the EU. Global South countries are already acting to counter these dynamics, but the EU should do its part as well. 

Building a global network of public money

The report also points towards an important practical step in this direction.

It calls for a “sovereign European public digital payments and settlement infrastructure ensuring interoperability and speed in cross-border, cross-currency transactions”, rooted in the development of central bank digital currencies (CBDCs).

CBDCs are digital forms of public money issued by central banks. Retail CBDCs can be used by households and businesses, while wholesale CBDCs are mainly designed for settlement between banks and financial institutions.

The report’s emphasis on interoperability is particularly important.

Interoperability means designing digital currency systems so that they can communicate and transact with one another. This could allow payments made using one jurisdiction’s CBDC to be received and converted within another jurisdiction’s system.

In practice, an interoperable network of CBDCs could make it easier to settle cross-border payments directly between different currencies, reducing the need to route some transactions through a “vehicle currency", i.e. a dominant third currency such as the US dollar.

This would not eliminate the importance of the dollar altogether, but it could reduce dependence on the dollar for some international payments and settlement, as well as on US private payment infrastructures that can become sources of geopolitical and financial vulnerability.

That is why interoperability should be a central consideration for the ECB. Without international coordination, technical standards, settlement systems and legal frameworks could develop in incompatible ways.

If Europe builds its digital currency infrastructure in isolation, it risks missing an opportunity both to reduce injustices and vulnerabilities in the International Monetary and Financial System and to strengthen the euro’s international role.

And yet, where’s the strategy?

The report also calls for the development of a safe asset to finance European public goods and asks the Commission to strengthen the use of the euro in international trade. It also proposes exploring incentives for pricing and settling clean-technology exports in euros.

If designed for clear shared priorities, a safe asset in the form of a new, permanent joint debt instrument issued by the EU could strengthen the euro’s role as an international reserve currency while also providing long-term financing for green and social infrastructure. Similarly, encouraging the use of the euro in green trade could help strengthen its international role while supporting a greener, multi-currency monetary system.

These measures need to be part of a broader political vision. 

Yet, despite the growing debate around euro internationalisation, neither the ECB nor the European Commission currently plans to set out such a comprehensive strategy.

Without a clear vision, efforts to strengthen the euro risk becoming a collection of disconnected initiatives. Or, worse, they might reproduce the inequalities and dependencies that already make the International Monetary and Financial System so fragile.

Strengthening the euro should not simply mean replacing one form of monetary dominance with another. European policy should combine measures that expand the use of the euro with policies that give Global South countries greater monetary and financial autonomy.

As we propose in this policy brief, this could include increasing lending in local currencies, extending ECB swap lines to more Global South countries, supporting debt-for-climate swaps and backing reforms to institutions such as the International Monetary Fund.

The vision should not be a stronger euro at any cost, but a stronger euro within a fairer and more sustainable International Monetary and Financial System.