THE EVOLUTION AND PERSPECTIVES OF THE EURO’S INTERNATIONAL ROLE

In its start-up phase, many scholars argued that the euro would join or replace the dollar as an international currency. The use of the European currency in foreign trade and as a reserve currency, after rising significantly until 2007, has decreased considerably since the global financial crisis. The main reason for this decline is that, in recent crises, the euro area financial market appeared to be extremely fragmented. This reduced the liquidity of assets denominated in euros. One of the prerequisites for a currency to become an international currency was lacking.