Changes from report parliamentary committee draft to plenary report

AddedG. whereas the EU should protect the integrity of its financial infrastructures and the independence of its market operators against foreign policy unilateralism and potential extraterritorial sanctions by third country jurisdictions, and ensure, at the same time, the effective enforcement of EU sanctions policy;

AddedH. whereas deep, liquid euro-denominated financial markets, and the progress towards an efficient savings and investments union, the completion of the banking union and the fulfilment of the One Europe, One Market roadmap, should play a fundamental role in strengthening the global role of the euro;

Removed6. Agrees, therefore, with the ECB President on the need for the euro to ‘move from being “in between” to being a full international currency’; underlines that a stronger role for the euro internationally would help insulate Europe’s economy from swings in foreign exchange rates, secure better financing conditions for the European economy and expand protections from foreign measures;

Added6. Stresses that the above dependencies expose EU citizens and firms to extraterritorial application of sanctions from non-EU countries, or to the threat thereof; considers the fact that European individuals, including members of the International Criminal Court, have been blocked from accessing basic banking services to be a regrettable illustration of those vulnerabilities; stresses the fact that strengthening the EU’s economic resilience and policy autonomy should become a strategic objective of the EU;

Removed7. Considers, in this context, that the internationalisation of the euro is about strengthening its role within a more multipolar international monetary system;

Added7. Considers that strengthening the international role of the euro can generate benefits both in the short and long term; underlines that a stronger role for the euro internationally would help insulate Europe’s economy from swings in foreign exchange rates, secure better financing conditions for the European economy and for the green and digital transition, and expand protections from foreign measures, thereby increasing the EU’s macroeconomic autonomy;

Removed8. Stresses that a stronger global role for the euro will not emerge through market forces alone, but requires a coherent strategy by which public authorities establish the conditions for its wider use; observes that the US and China are actively pursuing such strategies in support of their currencies;

Added8. Considers that the main levers for strengthening the euro’s international role would also mitigate the adverse appreciation effects of stronger euro demand by absorbing inflows more efficiently and reducing exchange rate risk and hedging costs;

Added9. Stresses that any strategy to strengthen the international role of the euro must be pursued on the basis of a clear-eyed assessment of both its benefits and its costs; notes the distinction between passive safe-haven currencies and full international currencies; stresses that passive safe-haven currencies may face appreciation pressures driven by external shocks rather than domestic economic fundamentals, with potentially adverse effects on competitiveness, inflation and monetary policy; recognises, by contrast, that full international currency status confers significant advantages, including, precisely, insulation from exchange rate volatility, lower borrowing costs, geopolitical leverage and seigniorage benefits, while also entailing structural obligations and constraints, notably the capacity to provide safe, liquid and credible assets at scale to global markets; agrees, therefore, with the ECB President on the need for the euro to ‘move from being an “in between” to being a full international currency’;

Added10. Stresses that a stronger global role for the euro will not emerge through market forces alone, but requires a coherent strategy by which public authorities establish the conditions and policies for its wider use; observes that the US and China are actively pursuing such strategies in support of their currencies; stresses, however, that the EU should develop its own distinct approach without emulating the specific models of those countries;

Added11. Is concerned that the economic and monetary union’s lack of ability to speak as a unified voice with international institutions can hold back the international role of the euro;

AddedStrengthening the economic foundations of the euro

Added12. Notes that deep, liquid and competitive financial markets are key to strengthening the international role of a currency; stresses, accordingly, that the internationalisation of the euro depends on the further development of EU capital markets and genuine cross-border equity market integration; considers that European savings should be channelled more effectively towards investment within the Union rather than being predominantly intermediated through US capital markets; regards deeper and more integrated capital markets as a prerequisite for the euro internationalisation strategy; calls for the timely completion of the savings and investments union and related policy initiatives that will deliver a globally competitive toolbox;

Added13. Stresses that European savings should be mobilised towards productive investments in the EU through integrated and competitive capital markets, greater retail investor participation, appropriate investment incentives and a stable regulatory framework; considers, however, that the EU’s core challenge is not a shortage of financial capital, but a lack of state capacity to direct it towards common strategic priorities at the necessary pace and scale; stresses that this requires a framework that provides not only incentives, but also the necessary discipline;

Added14. Calls, in line with the ECB President’s and the Bundesbank President’s statements, for the development of a deep and liquid common European safe asset to help strengthen the euro’s international role; points out that EU safe assets can provide high-quality collateral in international repo markets and offer a euro-denominated liquidity buffer alongside public backstops; agrees with Mario Draghi that, within the EU, such assets would reduce financing costs, weaken the bank-sovereign nexus and help create a genuine European bond yield curve, which would deepen capital market integration by providing a reliable benchmark for price formation in financial products;

Added15. Stresses that an EU safe asset can only fulfil these functions if issuance reaches a scale sufficient to create a deep and liquid market; underlines that this could be achieved through new common issuance to finance genuine European public goods; emphasises the need for such financing to be allocated and managed at EU level, with a clear repayment mechanism established from the outset, through predictable and credible EU own resources without mutualisation of national debt; stresses that any discussion on potential EU safe assets must fully respect Member States’ fiscal responsibilities, avoid permanent debt mutualisation and minimise moral hazard risks;

Added16. Stresses that the international role of the euro is underpinned by sustainable and sound fiscal and structural growth-enhancing policies based on a commitment to credible fiscal rules to maintain the stability and integrity of the euro; acknowledges that high sovereign debt levels can weaken fiscal credibility, causing investors to become more sensitive to the fundamentals of the economies concerned and thereby act as a catalyst for potential financial crises;

Added17. Encourages EU initiatives that facilitate the inclusion of EU supranational bonds in major sovereign bond indices, thereby lowering their yield premium and supporting a deeper and more liquid market; advocates integrating the European Stability Mechanism into the EU legal and budgetary framework as a step towards strengthening the EU’s financial architecture and reinforcing the international role of the euro;

Removed13. Stresses that reinforcing the euro’s role across cross-border value chains requires the further development of bilateral swap lines with EU Member States, which remain currently restricted; points out that expanding the Eurosystem’s international liquidity backstops to partner jurisdictions, including in the Global South, can help safeguard euro liquidity abroad and thereby enhance the offshore use of the euro;

Added22. Emphasises that borrowing, lending and settling in euro requires a sovereign European public digital payments and settlement infrastructure ensuring interoperability and speed in cross-border, cross-currency transactions, with a European central bank digital currency (CBDC) in its wholesale functionality lying at its core; considers that the digital euro is the foundational infrastructure layer upon which euro internationalisation depends, and reaffirms its full support for its rollout as a priority instrument of European monetary sovereignty; calls on the ECB to ensure an adequate balance between financial innovation and stability; welcomes, in this regard, the ECB’s wholesale initiatives, notably Pontes and Appia; supports their orderly and more rapid implementation;

RemovedTowards EU safe assets

Added23. Underlines the importance of interoperability with other international settlement and payment systems; recognises that the digital euro in its retail function could also contribute to strengthening the euro’s international role by eliminating frictions and undue costs in remittance flows, creating a significant bottom-up economic incentive for resident and foreign households to adopt it and organically expanding the euro’s global footprint;

Removed14. Calls for the development of a deep and liquid common European safe asset as a key precondition for strengthening the euro’s international role; points out that EU safe assets can provide high-quality collateral in international repo markets and offer a euro-denominated liquidity buffer alongside public backstops; underlines that, within the EU, such assets would reduce financing costs, help create a genuine European bond yield curve, which would deepen capital market integration, and weaken the bank-sovereign nexus;

Added24. Stresses that reinforcing the euro’s role across cross-border value chains requires the further expansion of bilateral swap lines with EU Member States and internationally, which remain currently restricted; points out that expanding the Eurosystem’s international liquidity backstops to partner jurisdictions can help safeguard euro liquidity abroad, as well as financial stability within the euro area, and thereby enhance the offshore use of the euro; highlights that liquidity lines, such as repo lines, are not substitutes for permanent foreign currency swap lines, which are essential for fostering deep-seated trust in the euro’s global availability; welcomes the ECB’s enhanced Eurosystem repo facility for central banks (EUREP), which provides standing access to euro liquidity lines, in principle, for all international central banks, while noting that it benefits central banks already holding euro reserves rather than those in the process of building them; calls on the ECB to better address, in its annual report to Parliament, the criteria applied to determine eligibility for swap line arrangements, and to assess whether those criteria adequately serve the objective of euro internationalisation, including, where relevant, with respect to the Global South countries; acknowledges that Ukraine has no ECB swap line and that a swap line would help reduce Ukraine’s foreign exchange strains;

Removed15. Stresses that an EU safe asset can only fulfil these functions if issuance reaches a scale sufficient to create a deep and liquid market amounting to 20% of the EU's GDP; underlines that this requires both new common issuance to finance European public goods and the exchange of part of the outstanding stock of national sovereign debt into common EU bonds;

Removed16. Supports the establishment of a European debt agency, anchored in the EU's budgetary framework, that would consolidate existing borrowing programmes and future common issuance under one roof; considers that this would lower issuance costs across different legal regimes and help develop a more liquid market;