On European Fragmentation and the Single Currency in an Uncertain World

Europe faces growing strategic and economic challenges arising from the policies of the second Trump administration, extending beyond trade to energy, defence, digital services, and cross-border payments. Heightened uncertainty over US policy has raised concerns about the stability of the international monetary system and the future role of the dollar. In this context, some observers argue that the European Union could strengthen its geopolitical position and that the euro could assume a more prominent role as an international reserve currency. However, market fragmentation, political divisions and heterogenous legal frameworks continue to constrain this prospect. Sustaining Europe’s economic and geopolitical standing in the face of demographic, technological, and market pressures requires a coherent reform agenda aimed at deepening integration, improving policy coordination and communication, preserving economic openness, and managing the social consequences of economic transformation.