ECB’s Rehn: European Growth “Too Modest”; Dollar Challenged But Apt to Remain King

17 October 2025

By David Barwick – WASHINGTON (Econostream) – European Central Bank Governing Council member Olli Rehn on Friday said that Europe was in need of measures to boost too-weak economic growth and that the US dollar’s hegemony was being challenged but likely to continue.

In remarks at the Peterson Institute, Rehn, who heads the Bank of Finland, said that Europe had traversed a difficult period “remarkably well” and with “remarkable resilience.”

The economy had remained above water, was projected to continue to grow, and, “perhaps most importantly,” he said, labor markets had held up well.

“But resilience is not the same as dynamism,” he continued. “Our growth is steady but rather modest, too modest. In short, Europe’s problem is not survival, it’s momentum.”

His “main message,” he said, was that “[a] stronger international role for the euro requires a stronger, more dynamic Europe. Both in security and in the economy.”

In this context, Rehn urged enhancing productivity growth and industrial competitiveness. It was necessary to complete the Single Market; achieve a Savings and Investment Union; promote scale-up finance and innovation ecosystems; invest in human capital; and attract global talent, he said.

According to Rehn, “Dollar dominance is likely to persist for quite some time, but its unipolar hegemonic supremacy is being challenged by geopolitics and digitalization.”

The international monetary system would “probably” become “more multipolar,” he said. This compelled a fundamental reconsideration of the euro’s place in the system, he said.

The current era was “less rules-based and more power-based” than previously, he said. “The international monetary system is becoming more fragmented, more contested, and more strategic.”

The resilience of the euro area rested on “the rule of law, macroeconomic stability, and the world’s second-largest integrated economy,” he said.