The European Union has had great difficulty over the past 12 years since the 2008 global financial crisis. But it has largely been a success story in terms of the difficult 70-year phase from the beginning of the Cold War to date.

It was a huge success in the sense that a geography like Europe, which has seen wars and human tragedies for centuries, is now defined and accepted as a center of attraction, setting the standards in terms of permanent peace, sustainable development, high-quality democracy and fundamental human rights.

The six founding countries of the EU, especially Germany and France, however, miscalculated the union’s strength, as they accelerated the union’s enlargement process faster than it needed to be. They thought all mechanisms of the union were ready for expanding and positive results would be permanent.

They rushed to transform their successful “single market” project to the “single money” phase. More precisely, they included countries that were not ready for such a transition, even though they saw that they could not fulfill the conditions in the eurozone. At the same time, putting aside the traumas caused by World War II, they started to discuss concepts such as a European army.

However, today we can see much more clearly that forming a common monetary policy with the European Central Bank (ECB) was not enough to achieve full harmonization in the field of economic policies. It is also necessary to establish an adjustment model on the common fiscal policy.

The global financial crisis in 2008 and the current coronavirus pandemic both saw various developments that severely affected solidarity within the EU and raised the question of whether the project had failed. Britain’s decision to leave the EU, called Brexit, was the biggest blow.

Germany, who is still the most right-minded and therefore the “big brother” of the union, and Merkel, who has been chancellor of Germany since 2005, bears the burden of much of the work.

This is also because France has not been able to find a leader since former President Francois Mitterrand, who would bring calmness, respect and dignity to its international politics.

For this reason, Germany, and especially Merkel, has to balance and level the nonsense of politicians like former French President Nicolas Sarkozy and incumbent President Emmanuel Macron.

Merkel believes that it is necessary to build a new set of relationships with global powerhouses such as the U.S., Russia and China. Being well aware of the shift in the center of gravity of the global system and of the era called “the new normal,” she is putting in a considerable effort for strong relationships with Turkey.

The EU needs to reinvent itself and revive its resources and capabilities. The EU is taking on a pioneering role, in the name of the world economy and global trade, on topics like carbon emissions and zero waste. And plotting a new story in this field could be a permanent way out for the EU’s future.

Otherwise, the future of the project will be increasingly threatened by the risk of right-wing extremism and increasing disbelief toward the culture of solidarity.

Future of US dollar

The United States is preparing to hold one of the most interesting presidential elections in its history. Of course, the struggle between the two candidates is being followed with great curiosity worldwide.

In an environment adorned with the harshest messages in history, where candidates directly insult each other, strange scenarios are being discussed. Let alone the citizens on the street, even Facebook founder Mark Zuckerberg expressed his concern that there might be armed clashes on the street and protests in favor of the candidates on the election night. He also indicated that the U.S. will talk a lot about what will happen until Election Day and after.

Having said that, international economic circles are seriously discussing what will be the effects on the global economic-political system in the scenarios where U.S. President Donald Trump or Democratic presidential candidate Joe Biden would be the next U.S. president.

It is understood that if President Trump is elected, he would further escalate tensions with China and Iran, continue to change the regional balances in favor of Israel in the Gulf and the Middle East, and a highly volatile set of relations will continue with Russia and the EU. Experts agree that such a picture will be quite tiring for the performance and value of the U.S. dollar.

On the other hand, there is a strong belief that if Biden is elected president, the Trump-era policies on China, Iran and the Middle East will not be managed with the same rigidity or in a way that will further escalate the tension.

At this point, it seems highly likely that fresh breath would also be brought to the U.S.-EU relations. On the other hand, the issue of Russia is believed to be a little bit more complicated under a Biden administration.

For this reason, it is believed that Biden will cause less strain, and may in fact reduce the tension, in terms of the global political economy, which would lead to a more positive result in terms of the value and performance of the U.S. dollar.

The most critical issue that the world is wondering about is, in the case Trump is reelected, whether or not he will continue to impose sanctions and embargoes that are against international law and unapproved due to projects that do not suit the U.S. or cooperation between countries.

Moreover, another question is whether he will use the dollar-denominated international payment and transfer system as a threat or a threat mechanism. In fact, he points out that it is not an unlikely possibility that Biden would resort to such methods in his time if he wants to pressure others.

However, whichever president takes office, it would be the biggest mistake to use the dollar-denominated international payments and the money transfer system as a threat vehicle. Because it would directly threaten the U.S. dollar’s specialty as the global reserve currency, the move would be shooting the U.S. in its own foot.

Therefore, if the U.S. insists on this attitude, it seems inevitable that the dollar will lose significant share in the central banks’ reserves against the euro, Chinese yuan or gold.


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