Xia Ri
In the era of globalization, the U.S. dollar has been the most important financial dominant force globally since World War II. The euro, on the other hand, is a later development. The euro was established in the Maastricht Treaty, signed in 1992 by the European Union to create an Economic and Monetary Union of Europe (EMU). It officially began on January 1, 1999, as the currency for 20 EU countries, with a population of 300 million people using it. Europeans pride themselves on the fact that the euro is the most significant result of European monetary reform since the Roman Empire. During the peak of globalization, for many years after the euro’s introduction, Europe openly declared that the euro was the primary force to counterbalance and share the global market with the U.S. They spared no effort in promoting and enhancing the euro’s status as the world’s main reserve currency. This narrative was only denied by Europeans after the Trump administration took office, in an attempt to downplay the longstanding financial rivalry that had existed for decades.
After Trump took office, as the U.S.’s stance toward Europe became clearer, the trend of ideological divergence between the U.S. and Europe grew more apparent. Consequently, the confrontation between the U.S. and Europe is shifting from politics and ideology to economics, industries, and finance. This has led to the question: Could Europe potentially short the U.S. dollar to achieve certain political objectives? This question not only involves the operations of financial markets but also touches on geopolitical maneuvering and competition in the international monetary system.
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