LONDON: Brussels is ready to warn that just days before Biden’s inauguration as president, global markets are heavily dependent on the dollar to find ways to counter Europe’s threat from US sanctions and other financial risks. ۔
A draft European Commission policy seen by the Financial Times reveals the depth of EU frustration after four years of Donald Trump’s administration, whose policies have highlighted US dominance in the global financial system and its currency. What
In particular, the article highlights the EU’s difficulties in asserting its independence despite sanctions imposed on Iran by Mr Trump, and blocks these measures from “the effects of illegal extra-application”. Presented as evidence of the need to “save”. .
“Trump’s years have highlighted our weaknesses, and we need to get rid of them even if they are gone,” said a commission official. “It’s about the European Union’s place in the world – which means having economic and financial strength according to our size.”
Mr Trump’s Iran strategy has had a direct impact on financial infrastructure in Europe, such as the Swift payment messaging system and the Euroclare and Clearstream securities reserves.
Trump’s years have highlighted our weaknesses, and we need to get rid of them, even if the European Commission official has gone beyond Washington’s sanctions on Iran. Facilitate the payment of legitimate trade between the European Union and the Islamic Republic. Full of difficulty
The article states, “The EU should take steps to protect EU operators if a third country forces the EU-based financial market infrastructure to comply with its unilaterally approved sanctions.” ۔ “
The document underscores the EU’s desire to strengthen its self-reliance in a number of areas, including finance, following the Trump administration’s increase in transplant principles. But Joe Biden was sworn in as US president on Wednesday by the European Commission, and the EU has sided with Washington following Trump’s success over the years. Promises to find a new era of cooperation.
Other projects on paper aimed at promoting the bloc’s strategic autonomy include strict policing of foreign takeovers using the EU’s new system for screening foreign direct investment.
According to the document, the proposal should be seized that they “make the EU target company more likely to comply with such illegal sanctions.” On this basis, the acquisition could be stopped on the basis of national security, the document said.
According to the draft, the EU also needs to find ways to promote the role of the euro in light of the lessons learned from Code-19 epidemics. The newspaper warns that “the US dollar has been heavily relied upon to reduce the risk of US tensions and instability in global financial markets.”
EU officials have warned that the draft could be amended before it is adopted by the European Commission on Tuesday.
The bloc has long sought to maximize the use of the euro, for example in commodity contracts, to strengthen its financial and economic sovereignty.
Specific measures in this article include the use of a systematic review of the EU benchmark of financial benchmarks to encourage the euro to stand out. Most are based on dollars.
Policymakers want to find energy alternatives to crude oil, where key benchmarks such as Brent and WTI are tied to the dollar. The article cites gas, where the euro-based agreement is rapidly emerging in Amsterdam, and the hydrogen markets where the role of the euro should be developed.
Brussels believes a strong global role for the euro will “protect the economy from foreign exchange shocks and reduce dependence on other currencies.”
“It will also help achieve common global goals such as the flexibility of the international financial system, a stable and diverse global currency system, and wider choice for market operators, which will weaken the global economy.”
The Commission is also concerned that the bloc is increasingly relying on non-EU investment banks that “in times of financial crisis … they may choose to reduce their presence in the EU and focus on their domestic market.” Are
Other parts of the paper reiterate the desire for more independence from the EU’s financial market infrastructure after Brexit. Especially clearance houses in the UK.
Financial Times Limited 2021 Copyright