ContextSpeech by the Bundesbank President on the international role of the euro, given during the 2026 FIFA World Cup semi-finals.
Why it mattersThe Bundesbank President on the euro's global role and on political pressure on central banks, including in the United States.
- The world economy is fragmenting.
- The euro plays a smaller global role than the dollar.
- Political pressure on central banks is rising, including on the Fed.
- Offer investors reliable returns on euro assets.
- Advance the savings and investment union.
- Develop a European payments strategy to strengthen the euro.
Read the speech summary
1. The euro's place in the ranking
Using the World Cup as a metaphor, Bundesbank President Joachim Nagel said the euro is the world's second most important currency but far behind the dollar: the dollar made up 57% of foreign reserves at the end of 2025 against about a fifth for the euro, and about 60% of foreign-currency debt against around 30% for the euro; US exporters invoice almost entirely in dollars while EU exporters take dollars for about a third of their sales. The dollar is unlikely to lose its role soon but is not invulnerable: Bundesbank research found that political pressure on the Fed was read by markets as a loss of confidence, with equities down and uncertainty and gold up, and gold's dollar price jumped nearly seventy percent from the April 2025 tariff announcement until the strikes on Iran, then gave back about half. The euro gained little, and stablecoins, almost all dollar-based, could further help the dollar.
2. Why a stronger euro matters and how to get it
A stronger international euro would bring strategic autonomy, less exposure to exchange-rate swings and lower funding costs. The basics are trust in price stability backed by central bank independence, a rule-of-law framework, defence capability and stable growth. Channelling savings to productive uses through the savings and investments union, including partly centralised supervision at ESMA, cheap access for small investors and better financial literacy, would help finance innovative firms. He added that institutions in Europe need to be able to rely on a stable legal order and that those qualities are worth more today because they are no longer guaranteed. Reliable euro liquidity abroad matters too: the ECB made its EUREP repo facility permanent for central banks worldwide, alongside swap lines.
3. The digital euro and wholesale central bank money
Payment sovereignty also underpins the euro's role. The digital euro would give one payment solution across the euro area, reduce dependence on non-European infrastructure and allow conditional payments triggered automatically on delivery or usage, though it will not be programmable money and users stay in control. A wholesale version, a project called Pontes, will deliver central bank money on distributed ledgers from this autumn. Together with better cross-border payments, public money as a base and private firms as innovators, these would make the euro more attractive. He closed by saying the euro must remain a strong player on team Europe, with the Eurosystem doing its share, and that Europe has a great future in the international monetary system.