ECB’s Stournaras: Trump Leads World to Question Dollar’s Safety; Euro Must Step up

22 May 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Thursday said that US President Donald Trump had made the global monetary framework so uncertain that the dollar’s safe-haven function was being called into question, creating an opportunity for the euro to become more important.

In an opinion piece written for The Economist, Stournaras, who heads the Bank of Greece, said that investors were no longer able to disregard Trump-induced economic uncertainty.

‘By eroding free trade, shaking global alliances, undermining the independence of the Federal Reserve and threatening to weaponise the dollar for political purposes, it has prompted the world to question whether the dollar is still a safe bet’, he said. ‘This should be a wake-up call for the euro area.’

The rupture with the tradition of America’s commitment to its historic role in the global monetary system created an opening for a rival currency, Stournaras said.

‘Investors around the world could be attracted to a stable, reliable alternative’, he said.

Constraints on China’s currency limited its potential, he said. ‘That presents the euro area with both an important opportunity and a serious challenge’, he said.

However, taking advantage of this opportunity required stronger growth in the euro area, he said. The loosening of German fiscal restraints was a step in this direction, as was European defence spending, he said.

It remained to complete monetary union, he said.

In addition to a banking union, a capital markets union and common fiscal governance, Europe also needed to boost its competitiveness, he said.