European Central Bank Governing Council member Pierre Wunsch stated in a recent Brussels interview that Europe must be prepared for a stronger euro if it aims to enhance the currency's global standing. "If the euro is to play a more significant role internationally, its exchange rate could appreciate further," the National Bank of Belgium governor remarked. He raised a critical question: "If we are already concerned about the euro's recent gains, can we genuinely expect a substantial increase in its international influence? I am not certain."

Currently, European officials are seeking to capitalize on criticisms of global trade and U.S. institutions to bolster the euro's international position, aiming for the eurozone to enjoy privileges previously exclusive to the U.S. dollar. However, some worry this strategy might drive up the euro's value, negatively impacting exporters and the broader economy. At last month's Eurogroup meeting, France urged an assessment of related risks, while ECB President Christine Lagarde attempted to downplay such concerns.

Wunsch acknowledged the link between the euro's international status and its exchange rate but expressed no alarm over recent appreciation. He noted that the euro has historically approached 1.60 against the U.S. dollar and emphasized that evaluating the euro's strength "should not focus solely on its exchange rate with the dollar but also consider its effective exchange rate—its overall performance against other major global currencies."

Regarding interest rates, unchanged since June last year, Wunsch said it would be premature to predetermine triggers for adjustments. He reiterated that it is too early to assess the impact of Middle East conflicts on the economy and monetary policy, though such conflicts "could likely push energy prices higher." "Consequently, we must consider how to respond if inflation rises again," he added.

On joint financing for increased European defense spending, Wunsch maintained a cautiously open stance. "More important than joint financing is integrating Europe's defense industry—though we recognize this is challenging," he commented. "But if political arrangements allow some defense spending to be coordinated at the European level, why not explore that possibility?"