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Why hasn't Euro become the default global reserve currency yet? (lemmy.zip)

submitted 5 days ago by CmdrGraves@lemmy.zip to c/asklemmy@lemmy.ml

19 comments fedilink hide all child comments

I know that Euro is the second most traded currency but it doesn't have the #1 spot because of the US Dollar (which is printed on top of piling debt by the way) since oil is priced in USD per barrel instead of quoting it in EUR per barrel (since the US has monopoly on oil).

Money printers for the USD are running constantly, going "BRRR" and have a high national debt. They're putting themselves further into that hole whilst printing more cash. What about the Euro? Is it even printed that often 24/7 or controlled to print a capped amount?

The only way to really Euro become superior is to incentivize it on a international scale (more than the US Dollar) on getting countries to accept & trust it more (but USD accounts for 60% of global commerce) so the Euro has A LOT of catching up to do on that.

Does the EU really have power or control over OPEC (Oil)? If they can grasp monopoly over the Gulf states by convincing them to price every barrel in Euros: would that strengthen the currency? The British Pound is the former global reserve currency before the US Dollar.

If European travelers stopped converting EUR to USD, only using EUR for international travel towards currency exchanges: would that increase the demand for it since US Dollar is literally the default for A LOT of countries (even "third world" ones) in terms of payment.

Arbitrary numbers regarding forex aren't an indicator: so what if 1€ is worth more than $1? It's more on PPP and trust, so with a stronger Euro traveling abroad (including the Americas): does that make it cheap for you to visit as you're able to buy more than they can?

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[–] CommanderCloon@lemmy.ml 0 points 4 days ago* (last edited 4 days ago)

Because the dollar being the reserve currency is a direct result of the US being the world hegemon. As the US is falling, and China is expanding trade but not asserting itself as the hegemon, the world is becoming multipolar.

The EU's economic situation doesn't allow it to become the new hegemon either, and their political fragmentation makes them unreliable anyway.

The concept of a reserve currency might be outdated because of that multipolar world. And if not, the EU is in no position to impose the euro, as China is way more stable and has much better economic relations with everyone, including both US economic allies and enemies.

There would be no contest if China tried to assert the RMB as a world reserve currency, but AFAIK they're not interested in doing that.