How the Euro Can Replace the Dollar

The dollar makes up about 60 percent of foreign currency reserves; the euro about 20 percent .

The European Union might have a once-in-a-century opportunity to provide that stability and security to governments and investors.

But it won’t happen automatically, and it will require permanently ditching the traditional European allergy to debt and printing money.

A third of the pandemic-era bonds are set to expire soon, more than offsetting the new debt.

To replace dollars, many, many more euro-based assets—likely into the trillions —will be needed.

European Central Bank would be wise to set up its own swap lines, and make them formal and explicit.