This suggests that factors specific to the euro area are likely to have prevented the euro from rising more forcefully as an international currency. I see these factors as closely related to three broad shortcomings in the institutional design of the EU and EMU: First – the ability to provide stability both domestically and internationally.
Second – the limited depth and liquidity of euro area financial markets. And third – Europe not speaking with one voice on international matters, including national security. An international currency must be stable Take stability first. Empirical research confirms that, next to size and openness, stability is a key determinant of international currency use.