This can be achieved through a strong commitment to fiscal consolidation, in conjunction with increased household saving. However, a rebalancing also requires stronger domestic demand elsewhere. This will require reforms in emerging Asian economies, most notably in China, to boost domestic demand, by developing financial systems, and by increasing spending on social safety nets to reduce households’ precautionary saving.
If it is introduced, it would be an added option in cross-border payments that could contribute to efficiency gains and reduce existing dependencies. That would increase European sovereignty. And, in the longer term, it could pave the way for innovative business processes in the European economy.