- This is not the first time that the German export industry has found itself in the dollar trap. The dollar has depreciated sharply in recent weeks and made German products more expensive in the USA.
- German industry has high energy costs, a shortage of skilled workers and a lack of investment. Can the dCan digital euros alleviate export problems?
One against the euro weak dollar hits the German economy in a sensitive spot. European products are becoming more expensive for US customers, while German companies cannot reduce their margins at will. Medium-sized exporters in particular, who often do not fully hedge exchange rate risks, feel the strain directly. In addition, demand from China is weakening and geopolitical uncertainties are putting a strain on supply chains.
In this situation, the digital euro could play a strategic role. It would not change the exchange rate, but it could reduce Europe’s structural dependence on the US dollar in international trade. Central bank digital currencies enable direct, fast and cost-effective cross-border payments.
Direct payments without dollars
If European companies could conduct their international business more often directly in euros, without going through the dollar, this would reduce their vulnerability to dollar fluctuations. The euro would become more attractive as a trading currency because it would be technologically enhanced and easier to use globally.
The digital euro could also modernize Europe’s payment infrastructure and make it more internationally competitive. Real-time processing, programmable payments and lower transaction costs would make the euro area more attractive for trading partners outside Europe.
Contracts in euros
It would be much easier for companies in Asia, Africa and South America to conclude contracts in euros if processing was faster, cheaper and more reliable than it is today.
In addition, the digital euro has a geopolitical dimension. China is pushing forward the digital yuan, the USA is working on its own concepts, and numerous emerging countries are testing digital currencies for bilateral trade agreements. Without a digital euro, Europe risks falling even further behind technologically and strategically.
More EU sovereignty in the global market
A strong euro in global payment transactions would increase Europe’s economic sovereignty and thus indirectly improve the position of German exporters. Whoever provides the infrastructure makes the rules – and whoever makes them strengthens their economic power.
Nevertheless it is digital euros are not a miracle cure. It will not affect the euro-dollar exchange rate and it will not solve structural problems such as high energy prices and excessive bureaucracy. Short-term relief for exports is also not expected. Its impact will unfold in the long term, as part of a strategic realignment of Europe in the global financial system.
In the end, it can be said that the digital euro cannot directly protect Germany’s export economy from the consequences of a weak dollar. But it can improve the framework conditions by reducing dependence on the dollar, strengthening the euro as a global trading currency and increasing the efficiency of international payment transactions.
This makes it a building block of European economic sovereignty – and an instrument that can stabilize the competitiveness of German exporters in the long term.
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