A promising time is in store for the euro. ECB President Christine Lagarde believes that the euro has a realistic chance of becoming a “viable alternative to the dollar.” At the same time, she emphasized that the rise of the euro’s global role must be accompanied by enhanced military strength in the EU. Curiously, the euro will benefit from the growing military capacity of the euro bloc.    

Lagarde anticipates that if the euro manages to dethrone the greenback, this will bring significant benefits to EU member states. However, European governments must cement the bloc’s financial architecture and improve its security to achieve this goal. “The strengthening of the euro’s role must go hand in hand with building military power that can support partnerships,” she stated.

The ECB chief also noted that the current environment is favorable for the single European currency. But this role cannot simply be assumed — it must be earned. This means Europe needs a deeper and more liquid capital market, along with stronger legal foundations and a firm commitment to open trade.

Earlier, Lagarde highlighted the prolonged weakening of the US dollar. Meanwhile, the dollar accounts for 58% of international reserves, the lowest share in decades. Yet even in this context, the greenback still outranks the euro, which holds only 20% of global reserves.

Nonetheless, the ECB president remains optimistic. “Investors today are seeking geopolitical assurances. They are allocating money to regions that are reliable partners in security matters,” Lagarde added. From her viewpoint, the European Union is exactly the region to serve this purpose.

At the end of March, Lagarde declared that the EU must seize the reins of leadership, following a series of aggressive moves by the US administration. She now believes that Washington’s current policies give Brussels an opportunity to gain autonomy in defense, energy, and finance.