EU seeks to reduce dependence on the US dollar and other financial centers

EU seeks to reduce dependence on the US dollar and other financial centers

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BRUSSELS, Jan 20 – The European Commission said on Tuesday it would seek to strengthen the international role of the euro and build European financial infrastructure so that the bloc becomes more independent from international financial centers and the dominance of the US dollar.

The initiative, which is the announcement of a long-term strategic direction rather than an action plan, comes after the United Kingdom left the EU, which left the City of London – Europe’s largest financial center – out of the jurisdiction of the block.

 

“With the UK’s withdrawal from the EU, there is a great need and opportunity to develop local market infrastructures,” the Commission said in a document addressed to EU governments, the European Parliament and the European Central Bank (ECB). ).

The EU also resents the repercussions of US President Donald Trump’s decision to withdraw from the Iran nuclear deal in 2018 and reimpose his country’s sanctions, preventing Europeans from being able to trade with Iran on the terms. of the agreement.

 

Securities depositories Clearstream and Euroclear, based in the EU, were affected by the decision and the banking messaging and payment system SWIFT, also based in the bloc, had to disconnect Iranian financial institutions.

 

“The European Union should develop measures to protect the operators of the bloc in case a third country forces the infrastructures of the financial market of the EU to comply with sanctions adopted unilaterally, or by other means that interfere with the legitimate operations of the EU, “the Commission said.

But the bloc’s executive did not offer immediate solutions and said that it would first assess the vulnerabilities of the EU and then “develop tools to counteract them.”

 

The Commission said that to strengthen the effectiveness of the EU’s own sanctions regime, it would review how they were circumvented, including through cryptocurrencies and stablecoins, and would make proposals in 2022.

The Commission will also engage with market participants to encourage trading in euro-denominated debt securities, commodities and other instruments, especially as the EU will issue € 750 billion ($ 910.65 billion) of joint debt to finance your recovery after the pandemic.

 

EU market players should reduce their dependence on clearinghouses, called external, central counterparts and make more use of those based in the 27-nation bloc, he said.

(1 dollar = 0.8236 euros)

 

Ben Oakley
Ben Oakley is the guy you can really trust when it comes to Mainstream News. Whether it is something happening at the Wall Street of New York City or inside the White House in Washington, D.C., no one can cover mainstream news like Ben. Get a daily dose of Trustworthy News by Ben Oakley, only at Globe Live Media.