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Finance Chiefs Push to Expand Euro's Global Role

Source: Bloomberg Business

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As the US dollar weakens amid geopolitical upheaval, Euro-area finance ministers are pushing to expand the role of the single currency. They met in Brussels today and on their agenda was promotion of the currency's issuance and use in transactions.

Given the global context, it's become "existential for us to safeguard the international role of the euro as it is quite pertinent for the EU's monetary sovereignty," said Greek Finance Minister Kyriakos Pierrakakis, who chaired the meeting.

Over the weekend, the European Central Bank announced that it is prepared to offer euro liquidity to its peers from around the world in times of crisis -- its strongest move yet to promote the currency.

That's also one proposal included in a paper by the European Commission seen by us. The document calls for reinforcing euro diplomacy by reassuring partner countries about access to the currency.

The French government has called for an assessment of the economic risks. While it backs the push to strengthen the euro's international role, Paris wants better understanding of the costs to exporters if it drives up exchange rates against the dollar.

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Governments in Europe might look to fast-track securing a successor for t Christine Lagarde. The ECB president's term runs through October of next year and a decision would typically be taken that summer. But the possibility of victory, by either Marine Le Pen or her protege, Jordan Bardella, in the French presidential election scheduled for April 2027 voting may push leaders to adjust that timetable. There might be a lesson from the early resignation of Bank of France chief Francois Villeroy de Galhau, which left the selection of his replacement to Emmanuel Macron.

Most European officials are holding cards close to their chests, while insisting that it's too soon to confront that matter. Austrian Finance Minister Markus Marterbauer was the exception, telling reporters in Brussels that he backs sticking with the standard timeline in appointing the next ECB president.

The UK government has abandoned plans to cancel local elections scheduled for May in 30 areas. The move had faced backlash including a lawsuit from Nigel Farage's populist Reform UK party. Communities Secretary Steve Reed last month said the move was needed to allow for a reorganization of local governance but it was criticized by opposition parties. Farage accused the Labour government of trying to obstruct democracy. The local elections in May are seen as a critical moment for Starmer with Labour trailing Reform in the polls.

US Secretary of State, Marco Rubio pledged support for Hungarian Prime Minister Viktor Orban ahead of elections there in April. Speaking at a joint news conference in Budapest, Rubio said President Donald Trump would provide assistance, should Orban’s Hungary ever ran into financial trouble. “We want this country to do well. It’s in our national interest, especially as long as you’re the prime minister and the leader of this country,” he said.

Rubio’s remarks come as Orban struggles to close the gap in the polls behind the Tisza party of Peter Magyar, a former insider of the ruling Fidesz party, who wants to bring Hungary back into the EU mainstream. Trump earlier this month endorsed Orban, who uses similar nationalistic rhetoric and also takes an aggressive stance against immigration.

One million people in Somalia are under threat of severe hunger amid a lack of funding to tackle disasters. Scarce rain and warmer temperatures have caused drought conditions across the Horn of Africa. Somalia's government declared a state of emergency in November, saying 4.4 million people were affected. Many countries, including the US, have slashed humanitarian assistance, forcing United Nations agencies and other aid organizations to scale back food rations and emergency funding across Africa. The UN's agency for children Unicef has appealed for $121 million for Somalia, saying nearly two million children under five face acute malnutrition.

Switzerland's economy rebounded at the end of last year, partially shaking off the impact of outsized tariffs inflicted by the US. Gross domestic product adjusted for large sporting events rose 0.2% in the fourth quarter from the previous three months, when it dropped by 0.5%. The result is just below the 0.3% median prediction of economists in a Bloomberg survey. The reading suggests resilience in the Swiss economy after the initial shock of Trump's 39% tariff drove its biggest contraction since the pandemic.

The EU is to put so-called green steel at the center of its pitch to revive the continent's industrial fortunes. The move comes as the bloc is under pressure to stay competitive with the US and China. The European Commission will look to spur uptake of low-carbon steel by introducing voluntary certification programs and creating fresh sources of demand via public procurement and the automotive sector under its Industrial Accelerator Act due next week, according to a draft seen by us. The EU is attempting to halt an industrial decline that it attributes to high energy costs, excessive regulation and cheap imports.

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Finance Chiefs Push to Expand Euro's Global Role

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