The European Commission will launch a series of consultations with interested parties on the wider use of the euro in oil and gas transactions and report on the results in the summer of 2019.
“The Commission has adopted today a Recommendation to promote the wider use of the euro in international energy agreements and transactions. This will allow European businesses to benefit from stronger autonomy and finance themselves with reduced exposure to legal actions taken by third country jurisdictions. This will support the EU’s objective to build an Energy Union that ensures safe, viable and accessible energy supply,” the statement read.
The European Commission calls on EU countries to stimulate greater use of the euro in strategic sectors of the economy, the commission said in a statement.
“Despite its position as major buyers, as well as important producers, European businesses still trade in US dollars in key strategic markets, often even among themselves”, the EC noted.
This exposes them to currency and political risks, such as unilateral decisions that directly affect dollar-denominated transactions, according to the Commission.
“The European Commission will begin consultations on the market potential for the wider use of euro-nominated oil, petroleum, and gas transactions”, the statement read.
The Commission has stated its recommendations to EU trade exchanges to contribute to the development of oil and oil products sales in euro.
“Companies providing financial services and traders active on energy markets (especially targeting market makers) should be encouraged to develop euro-denominated derivative products using euro based references in physical trade,” the commission’s Recommendation on the international role of the euro in the field of energy says.
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The statements come amid growing discontent with the US sanctions and restrictions, concerning transactions in dollars.
The Russian Ministry of Finance has recently stated that it is considering the possibility of switching to the euro with its European trade partners, including in the trade of energy resources.
French Finance Minister Bruno Le Maire, for his part, has suggested using measures to make the euro stronger when it comes to international transactions as a response to US sanctions.
The euro is today the second most important international currency. Some 340 million European citizens use euro banknotes and coins every day across the euro area’s 19 member states. Around 60 countries in the world use, will use, or link their currency to the euro.