EU wants to depend less on US dollar

The European Union wants to end its dependency on the US dollar after enduring uncertainty and financial damage at the hands of US President Donald Trump.

The bloc has come to believe global markets are too reliant on the currency, and therefore too vulnerable to US sanctions, the Financial Times reported. The newspaper said it has seen a draft European Commission policy paper that shows just how frustrated Brussels has become with Trump's policies, which have forced the bloc to confront the dominance of the dollar.

The policy paper reportedly expresses concern the EU was not able to break ranks with the US on the issue of sanctions against Iran. It says Brussels needs the ability to "shield" itself in future from "the effects of unlawful extraterritorial application" of such measures.

Washington's sanctions against Iran meant the EU could no longer use traditional channels to make payments to Iran for legitimate trading.

"The Trump years highlighted our vulnerabilities, and we need to address those, even if he's gone. It's about the EU's place in the world－having the means to be an economic and financial power commensurate with our size," the Financial Times quoted an unnamed European Commission official as saying.

Need highlighted

The policy paper reportedly says: "The EU should develop measures to shield EU operators in the event a third country compels EU-based financial-market infrastructures to comply with its unilaterally adopted sanctions."

The paper said the Trump administration turned its back on trans-Atlantic norms in recent years. This highlighted the need for less dependence on the dollar and a higher profile for the euro.

It says: "Global financial markets are too reliant on the US dollar to cushion financial tensions and stability risks."

The policy paper says a stronger global role for the euro would "shield the economy from foreign exchange shocks and reduce reliance on other currencies".

Sputnik International, the Russian state-owned news agency, noted the EU began pushing for more use of the euro in 2018.

Ironically, the document will be discussed and likely adopted by the European Commission on the eve of Joe Biden being sworn in as the next US president on Wednesday. This means he will be left to deal with the fallout from the Trump years.

The EU is at the same time vowing a new era of cooperation with the US following the difficult Trump years.

The Bloomberg news agency said the draft policy paper will likely be further augmented in the future.