SIX: How the Euro Can Rival the Dollar

Publication Date:
24 Feb 2025
Pages:
101–118
DOI:
https://doi.org/10.51952/9781529249729.ch006
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If the euro is to seriously rival the dollar as an international currency, the size of the eurozone’s capital markets must match those of the United States. The eurozone’s bond markets present a particularly acute problem in this context because far from closing the size gap with the US bond markets, that gap continues to widen considerably. This chapter will argue that to reverse this situation, two things above all else are required. First, that the eurozone’s corporate debt funding model be radically changed in order to make bonds rather than bank loans the preferred form of debt instrument. Second, that Germany be made to loosen its highly restrictive stance on central government debt.

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