Mutations géopolitiques et recomposition du système financier international
In this second edition of the Revue d’économie financière given over to developing trends at global level, the economist Patrick Artus takes a deep dive into potential changes in the growth of the various regions of the world between now and 2015 and the effects of these on the global economic hierarchy.
“The United States is almost certain to remain the dominant economy in 2050 (with 35.4% of global GDP, up from 29.6% in 2022). The upturn in US production over China will be driven predominantly by demography, with the working-age population of China set to drop by an average of 1.2% year on year over this period. China’s weight in the global economy (22.8% in 2022, 23.5% in 2050) will probably more or less plateau, despite sizeable increases in productivity (3% a year). The European Union’s weight is expected to drop sharply (21.5% in 2022, 15% in 2050) with the stagnation in productivity and falling working-age population, as will Japan’s (6.4% in 2022, 3% in 2015) due to considerable demographic ageing”, writes the author, who goes on to predict “strong growth in India and Africa, but their very low starting point will not allow them to obtain any substantial economic weight in the global economy by 2050 (6% for India, 4.6% for Africa). The surprise will probably come from China’s results, as it will fail, by some considerable margin, to overtake the United States. This will result from demography (China’s population is set to fall by 8% between 2024 and 2050), the negative effect of ageing on productivity, no more investments by foreign businesses since 2022 and the very high rate of youth unemployment (officially 19%, probably considerably higher)” (our translation throughout).
However, the predictions for the United States are likely to be affected by the policies of the Trump administration, starting with its anti-immigration stance, in a context in which “immigrants represent 23.6% of business owners and individuals working in the field of science, 50% of business creators, 26% of workers in agriculture, 25.7% of consumer workers, 22% of jobs in transport and personal support services”. “The prediction [that] the potential growth of the United States will be 2.3% year on year up to 2050 becomes less tenable, because policies are being set in place that are not conducive to public research or universities”, Artus further notes.
“The ‘Draghi’ report (2024) clearly set out the euro zone’s disadvantages compared to the United States: less spending on R&D, particularly in businesses (2.8% of GDP in the United States compared to 1.5% of GDP in Europe), less investment in new technologies (3.8% of GDP in the United States, compared to 2.4% of GDP in Europe), less development of venture capital (22 billion euros in venture capital funds in Europe in 2024, compared to 250 billion dollars in the United States), low pension fund levels (22% of GDP in Europe, compared to 160% of GDP in the United States)”, the author stresses, before going on to express his doubts as to the Europeans’ chances of making up the shortfall. “As things currently stand, Mario Draghi’s recommendations (massive increase in public and private investment, setting out a European industrial policy) have not been implemented to any extent whatsoever”.
In a separate article, Barry Eichengreen (Berkeley Economics, University of California) and two European Central Bank advisers, Arnaud Mehl and Isabel Vansteenkiste, look at the future role of the euro on the international stage. Their starting observation is that its role as an official reserve currency has changed very little since its introduction: “in mid-2025, the euro represented 20% of global currency reserves, or just three percentage points more than in 1999”. “As regards its use as an invoicing currency for global exports, the euro’s share is higher, standing at 47%. This reflects the eurozone’s strong position as a major commercial hub […]. It is, however, worth noting that the euro’s share as a global invoicing currency has grown only marginally since 1999, with a rise of just two percentage points”, the authors add, going on to stress that “at the same time, considerable downturns can be observed for the euro, particularly in international finance, where its role has suffered in various areas. This is the case in the exchange market in particular, one of the world’s largest financial markets, with 9600 billion dollars of daily transactions recorded in April 2025 […]. The data of the Bank for International Settlements (BIS) show that between 2001 […] and 2025, the proportion of global transactions on the exchange market involving the euro fell by nine percentage points, to stand at 29% […]. The dollar’s share, conversely, remain stable at 90%, underscoring the dollar’s dominant role as the currency most frequently used as an intermediary in currency trading”.
“The euro remains first and foremost a regional currency, not a global currency. Of all the countries using the euro to anchor their exchange rate, not one is located outside Europe or Africa. Similarly, the euro is principally used as an invoicing currency for global trade in these regions, further underpinning its regional nature”, the authors note, going on to speculate as to a possible window of opportunity that may open up for the European currency given falling trust in the United States.
“Recent developments give Europe the opportunity to reinforce the euro’s global standing by occupying the space increasingly left vacant by the United States. The EU is already the largest trade partner of around 80 countries representing nearly 70% of global GDP and around 40% of global trade is invoiced in euros. However, there remains considerable scope for progress. Widening and deepening trade agreements will be an essential factor”, the authors stress, referencing agreements signed recently with Mercosur, India, Mexico and Australia. “Taken together, the agreements already finalised or under negotiation could boost EU exports to partner countries by nearly 40% between now and 2032 […]. The creation of new trade partners could allow the euro to consolidate its position in global trade, thereby bolstering the international dimension of the currency. The more the Eurozone’s share of global trade increases, the more its inclined its counterparts will be to invoice and settle their transactions in euro. Targeted agreements, particularly with countries affected by developments in US trade and foreign policy, give Europe an opportunity to reinforce its strategic autonomy and ensure that the euro becomes the natural choice for payments in international trade transactions”, the authors argue. They note, however, that “these efforts should be accompanied by the continuing development of infrastructure to allow cross-border payments to be made in euro”. They go on to explain that “efficient, inexpensive and reliable payment systems that operate transparently across borders reinforce the attractiveness of the currency. The interconnection of the Eurozone’s rapid payment system with similar rapid payment systems in other jurisdictions, by means either of bilateral links or connection to a common multilateral platform, could considerably reduce the costs and friction arising from using the euro beyond borders, thereby making it more attractive for commercial, investment and reserve purposes. These measures could bolster trade and financial relations with key partners, particularly the emerging economies, with further advantages if legislation on combating money laundering and the financing of terrorism is brought into line with the international standards set out by the Financial Action Group. They could also pave the way for the future use of digital currencies of the central banks for the purposes of cross-border payments”.
“The first measures in this direction have already been taken. The Eurosystem has started to look into the possibility of joining the multilateral network of pay-now systems, the Nexus project, launched by the BIS. It is currently studying ways of establishing bilateral links between its TIPS system and other rapid payment systems, for instance by establishing a bilateral link with India’s Unified Payments Interface (UPI), the pay-now system developed by the National Payments Corporation of India (NPCI) and governed by the Reserve Bank of India, and by establishing a bilateral link with the Swiss Interbank Clearing Instant Payments system (SIC IP), the pay-now system of the Swiss National Bank. Eventually, the potential issuance of a digital euro – a digital central bank currency issued by the ECB – could serve as an intermediary, offering a safe and effective option for cross-border payments. Its structure includes multi-currency functions and allow countries outside the euro zone to use the digital euro infrastructure to issue their own digital currencies and execute transactions between several currencies”, the authors further note. They go on to make a case for an extension of the joint issuance of debt denominated in euro and the creation of a Capital Markets Union.
“The principles underlying the global commercial order have little chance of surviving radical changes in trade”, argue the economists George Papaconstantinou and Jean Pisani-Ferry, in reference to the scale of China’s trade surplus (more than 1000 billion dollars in 2025) and American protectionism.
“President Donald Trump’s behaviour has already greatly eroded international standards of ‘good governance’. For decades, an implicit standard – a form of soft law – defined the behaviour that was acceptable. There were certain acts that were not prohibited because they were illegal, but because they deviated too far from this shared standard. By deliberately ignoring the safeguards aiming to prevent conflicts of interest, undermining the separation between executive power and independent institutions, dismantling development funding and taking the United States out of sixty-six international institutions (according to White House figures released on 7 January 2026), the Trump administration has driven a coach and horses through these standards”, the authors write. They go on to stress that “in today’s world, the aspiration for a coherent and prescriptive international order is no longer credible. The aim is not convergence towards a single model, but a more modest level of governance distinguishing between legitimate diversity – which may be the result of fragmentation, differing preferences or rivalry between major powers – and prohibited behaviour. In practice, global governance should function in the same way as a set of co-ownership rules: it should recognise the fact that preferences may differ, whilst enforcing a pillar of broadly accepted common constraints”.
“Security is now inseparable from economic power and technological leadership. Without getting too far into defence policy, it is worth noting that discussions on the future of NATO and the American ‘umbrella’ are increasingly focused on technological capabilities and sovereignty, and not just on spending, equipment and troops. Yet Europe still has no defence and technology policy as such of its own”, the authors observe, going on to point out that “the European Union initially adopted a wait-and-see attitude, including a compromise with the United States around tariffs in the region of 15% and European investment commitments, rather than following China in a policy of direct confrontation”. “It then expressed an inclination to mobilise more robust instruments, such as the anti-coercion instrument in response to American threats towards Greenland. At the same time, it is increasingly attempting to reinforce its position by concluding trade deals that have been on the table for a long time – Mercosur (now referred to the Court of Justice of the European Union, a fact that does not block its entry into force) – and, more recently, a deal with India of considerable geo-economic significance, but which will require lengthy preparations before it can be implemented”, Papaconstantinou and Pisani-Ferry write, going on to argue that “if Europe wishes to take a more predominant role on the international markets, it must (1) complete the Savings and Investment Union (Capital Markets Union), as otherwise, European savings will be unable to support growth, competitiveness and strategic autonomy, (2) make tangible progress on the international role of the euro and (3) agree on the principle – and on a credible volume of issuances – of European secure assets. These initiatives should come within the broader framework of the reforms of the EU economic model recommended by the ‘Draghi’ (2024) and ‘Letta’ (2024) reports, the implementation of which remains woefully inadequate”. (Olivier Jehin)
Mutations géopolitiques, fragmentations économiques et financières – L’ère des recompositions (available in French only). Association Europe Finances Régulations. Revue d’économie financière no. 161. Q1 2026. ISSN: 0987-3368. 268 pages. €35,00