“Sell America. »» The upheavals caused by Donald Trump's back and forth on customs duties have caused a highly unusual watchword through the world of finance: it is necessary to sell (part of) its American assets so as not to expose themselves too much to the head of the American president. In this logic, many investors have separated both from their American shares, their American obligations and their dollars. If the equity market has rebounded, at least temporarily, the greenback remains down almost 10 % against the euro since February.
Sell America, okay, but to buy what? The answer is far from obvious. Japan is dragging a sluggish economy, China is not a reliable partner, emerging countries are very volatile. Theoretically, Europe could do well. It is not dynamic but it is rich, and the rule of law is respected. In these circumstances, the euro, which is the second currency in the world, but three times less important than the dollar, can it take more importance? The stake is major: it is about European sovereignty, with the key to the ability of the old continent to finance itself more easily. At the end of the logic, it is a question of turning the “Exorbitant privilege of the dollar” Towards an “exorbitant privilege of the euro”.
“There is an opportunity that has opened (…) But it will not be offered to us on a set ”warned, on June 5, Christine Lagarde, the president of the European Central Bank. To take advantage of the Trumpian chaos, she explains, Europe must reform. In particular, it must reduce its main defect: its fragmentation between 27 countries (20 for the euro zone).
Create a large debt market
This is particularly obvious for the financing aspect of the economy. Where the United States has $ 29,000 billion (more than 25,000 billion euros) in sovereign bonds, tried until recently as the safest assets in the world, the European Union (EU) has 27 sovereign debt markets. The one who is considered to be the safest of all, Germany is $ 2,500 billion, almost 12 times less. For an American or Japanese investor who wants to put his money in Europe, it complicates the equation. In order to gain its financial autonomy, Europe must create a large debt market, which can compete with that of the United States.
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Source: Lemonde