FRANKFURT, May 26 (Xinhua) -- The European Central Bank President Christine Lagarde on Monday called for a greater international role of the euro, warning that the global dominance of the U.S. dollar is facing increasing uncertainty.
Speaking at an event at Hertie School in Berlin, Lagarde expressed her concerns about the risks posed to Europe from the fragmentation of the international system. "The changing landscape could open the door for the euro to play a greater international role," she added.
Lagarde outlined the benefits of the euro's enhanced global role, including lower borrowing costs for governments and businesses across the euro area, stronger internal demand, and more economic resilience. "It would allow Europe to better control its own destiny."
Although the euro currently accounts for about 20 percent of global foreign exchange reserves, making it the world's second most-used currency after the dollar, Lagarde cautioned that it "will not gain influence by default."
To boost the euro's global status, Lagarde proposed three key pillars: maintaining "a steadfast commitment to open trade" supported by credible security capabilities; strengthening the euro area's economic foundation to make it a top destination for global capital; and reinforcing the legal framework by defending the rule of law.
Lagarde noted that the U.S. dollar's share in global foreign exchange reserves has fallen to its lowest level since 1994, as gold has been accumulated by central banks worldwide.
Citing previous turning points in the evolution of the international monetary system, Lagarde said current changes create the chance for a "global euro moment."
"This is a prime opportunity for Europe to take greater control of its own destiny," she said. (1 euro = 1.09 U.S. dollar)
