EU to curb reliance on USD
Several days before the inauguration of President-elect Joe Biden, the European Union challenged the US currency and its dominance in the global economy. Its next step will be an attempt to protect global markets from the widespread dependence on the US dollar. Moreover, it is planning to mitigate the influence of the US sanctions and other financial risks on the EU region.
The European Commission has already developed a project of a document seen by the Financial Times. The key issue of the document is to find the most convenient and efficient method to improve the euro’s position in the global economy. The authors of the document suppose that the euro’s new status will protect the economy of Western Europe from various currency disturbances that may occur amid a weakening dollar. Thus, the region will be able to counter global monetary problems.
Brussels believes that the four years of the administration of Donald Trump underscored the dominance of the US making the greenback the only available currency tool. European officials are extremely disappointed in the current state of affairs. Moreover, there are a lot of examples when the US sanctions had a negative effect on the European region.
Thus, sanctions imposed against Iraq led to serious consequences and shattered the European financial infrastructure. The key aim of the EU authorities is to protect the region from such problems.
The US sanctions against Iran made the European Union search for new legal payment methods and ways to trade with the companies of the Islamic republic. This caused trouble. Moreover, sanctions were introduced without an agreement of the EU government. It means that the US does not take into account interests of the European countries.
Countries of Western Europe are planning to regain their independence just after Donald Trump leaves the post. Europe wants to bolster its influence in both the financial and energy sectors. The EU authorities intend to find an alternative to such oil benchmarks as Brent and WTI as they are too vulnerable to the US dollar changes.
The EU planned to adopt the project of the document before the inauguration of Joe Biden. After that, the relations between the EU and the US may significantly change. It will be really hard to oppress the rights of European countries.
However, the EU independence from the US dollar is not the only aim. The union also wants to ban transactions of cryptocurrencies, including bitcoin. The EU has already sent the relevant petition to the UK Parliament. The fact is that representatives of the UK government and business suppose that cryptocurrencies are valueless. However, they are widely used by fraudsters. Importantly, there is an opinion that cryptocurrencies may destabilize the national economy.
Notably, it is not the first attempt to ban the circulation of bitcoin. Earlier, the Russian government appealed to various countries to establish strict control over the cryptocurrency market. However, it was all in vain.