European Central Bank President Christine Lagarde stated that the global economic order, historically anchored by American leadership and the dominance of the U.S. dollar, is beginning to fracture.

Speaking at the Hertie School in Berlin, Lagarde outlined the implications of this shift for Europe and expressed that the changing environment could provide an opening for the euro to strengthen its international role.

Lagarde emphasized that the U.S. dollar has served as the primary global currency for decades, facilitating growth in trade and finance worldwide.

She noted that Europe benefited significantly from this system, which was built on multilateralism and economic openness.

However, she warned that this order is now being replaced by increasing protectionism and bilateral competition.

Referring to escalating global trade tensions, particularly under U.S. President Donald Trump, Lagarde highlighted recent threats of higher tariffs targeting multiple countries, including members of the European Union.

She cautioned that ongoing fragmentation and reduced global trade would negatively affect Europe’s economic performance.

Any disruption to global economic cooperation, she stated, would have adverse effects on European growth.

Lagarde acknowledged that the diminishing role of the U.S. dollar might create an opportunity for the euro to become a more prominent global currency.

A stronger international presence for the euro, she said, could bring several advantages, such as lowering borrowing costs for EU countries, mitigating currency volatility, and increasing Europe's financial independence.

She emphasized, however, that achieving this status would require deliberate action.

According to Lagarde, the European Union must remain committed to open trade, strengthen the foundations of its economy, uphold the rule of law, and invest in its security.

She underscored that the global prominence of the euro would not occur automatically and must be earned through consistent and strategic policymaking.

Lagarde’s comments followed renewed tensions between the United States and the European Union.

President Trump recently criticized the EU over trade negotiations and threatened to impose tariffs of fifty percent on European goods, up from the current ten percent.

If enacted, these measures would significantly impact transatlantic trade and further complicate economic relations between the two major economies.