European Commission President Romano Prodi, speaking yesterday to the Economic Club of New York, describes some of the euro's success in its first 18 months:
At the end of 1998, money-market instruments denominated in the euro's predecessor currencies accounted for just over 17% of world issues, compared to 58% for dollar-denominated instruments. By mid-2003, the share of issues in dollars had fallen to 30%, while the share of euro issues had climbed to almost 46%.Overall, therefore, euro-denominated debt issuance has increased enormously in a very short span of time.
And specifically about the euro as a reserve currency relative to the dollar:
As a reserve currency, the euro accounted for almost 15% of official reserves in 2002. Admittedly it still played a much smaller role than the US dollar, whose share amounted to 65%. By holding large amounts of US dollars, the European Central Bank itself contributes to the prevailing role of the US currency as an official reserve currency.
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