By staff and agency

Next EU chief backs reducing dependence on dollar in defiance of U.S. sanctions on Iran

November 11, 2019 - 20:39

Charles Michel, the next president of the European Council, has backed efforts to reducing role of the United States’ dollar and increasing the international role of the euro.

In an interview with the Financial Times published on Monday, he noted how dependence on the U.S. dollar had scuppered Europe’s attempts to uphold the Iran nuclear deal abandoned by U.S. President Donald Trump.

Iranian Foreign Minister Mohammad Javad Zarif said in July that the dollar’s role in the international business transactions has been undermined.

“Recently, Russia and China decided to do their transactions without dollar. In the past year, Iran and Turkey did 35 percent of their transactions without dollar and even India and the United Arab Emirates decided not to use dollar in part of their transactions,” he explained.

Iraqi Ambassador to Iran Sa’d Javad Qandil said in August that his country and Iran are considering mechanisms to use local currencies in their bilateral trade to reduce reliance on the U.S. dollar.

The two neighbors are holding talks to find the best way to facilitate their financial transactions, the ambassador noted.

CNN host Fareed Zakaria has predicted that the world will try to find an alternative to dollar as Donald Trump is using it a weapons against his opponents.

Writing an article in the Guardian on October 24, Jeffrey Frankel, a professor at Harvard University’s John F Kennedy School of Government, said “the language of international monetary policy has turned militaristic”. 

Frankel said, “The phrase ‘currency war’ has been popular for a decade and the U.S. government’s more recent ‘weaponization’ of the dollar is generating controversy.” 

“But ironically,” he added, “a martial approach could end up threatening the U.S. currency’s global dominance.”

NA/PA

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