‘EU should become less dependent on dollar’

The European Union believes that global markets are too dependent on the dollar and wants to take measures to counter the risks associated with it. This is what the British business newspaper Financial Times writes on the basis of a draft European Commission policy paper.

Among other things, this document quotes the sanctions unilaterally imposed on Iran by the United States. According to the committee, these showed European weaknesses. The US sanctions had implications for financial infrastructure in Europe such as the Swift payment system. In order to allow legitimate trade with Iran, the EU had to set up a special body. The policy paper states that the EU must protect European businesses and institutions from situations like this as a result of actions by third countries.

โ€œ The Trump years have exposed our weaknesses, and we must address them even when he is gone,โ€ says a committee official in the newspaper. โ€œIts all about the EUs place in the world, to be an economic and financial power with an influence appropriate to our size.โ€

More stringent controls

Other plans in the policy paper concern stricter controls on foreign acquisitions of EU companies. These need to be assessed in order to see whether the takeover is at greater risk of compelling companies to comply with the sanctions imposed by third countries. If so, acquisitions could be blocked on security grounds.

Furthermore, the EU wants the euro to be used more frequently in financial markets. As a result, European markets and businesses are less vulnerable due to fluctuations in the dollar. It would also make the international monetary system โ€œmore resilient and stableโ€.

The policy paper, to be adopted next week, also states that the EU should become less dependent on the UKs financial infrastructure. The committee mainly refers to clearing houses, which settle transactions on the stock exchange. Now that Brexit is now a reality, the Committee believes that the EU should stand on its own two feet.