Beyond the Dollar: Can Europe Loosen Its Grip on American Finance?

Finance may be the least visible of Europe’s dependencies, but it is arguably the most structurally entrenched. The dollar dominates global trade invoicing and reserves; American card networks process the large majority of European card payments; European startups routinely have to cross the Atlantic to find late-stage venture funding; and European capital markets remain fragmented along national lines in ways that push companies toward listing in New York rather than Frankfurt or Paris. Unlike energy or chips, this dependency was not imposed by a hostile actor cutting off supply — it developed because American financial markets are deep, liquid, and unified, while Europe’s are not. Closing that gap means building genuine alternatives, not just resenting the ones that already work.

Strengthening the Euro’s International Role

The euro is already the world’s second most-used currency for international payments and reserves, but it trails the dollar by a wide margin, and that gap carries real consequences: American sanctions gain much of their power from the dollar’s centrality to global trade, since businesses worldwide often have little choice but to comply with U.S. financial rules to keep accessing dollar-denominated systems. A more internationally used euro would give Europe greater ability to conduct trade, and occasionally to resist sanctions it disagrees with, on its own terms.

Expanding the euro’s role isn’t primarily a matter of policy announcements — it follows from deeper, more liquid European capital markets, political stability, and genuine fiscal integration that gives international holders confidence in the currency’s long-term stability. In that sense, this goal is less a standalone measure than an outcome of getting the other items on this list right.

Completing the Capital Markets Union

Europe has a single currency across much of the bloc but still lacks a single capital market: pension rules, insolvency law, securities regulation, and investor protections vary by member state, fragmenting what should be one deep pool of capital into 27 smaller, less liquid ones. This is a major reason European companies often struggle to raise the scale of capital available to their American counterparts, and why European savings — some of the highest household savings rates in the world — often end up financing American rather than European growth, flowing into U.S. markets that offer deeper, more liquid investment options.

The Capital Markets Union project has been under discussion for over a decade with real but slow progress, largely because harmonizing insolvency and securities law touches deeply on national legal traditions that member states are reluctant to cede control over. Progress here is unglamorous — it’s about legal harmonization more than headline investment figures — but it may be the single most important precondition for everything else on this list, from a stronger euro to a bigger venture capital market.

Building European Payment Systems

Visa and Mastercard process the overwhelming majority of European card payments, meaning routine domestic transactions between two European citizens often still run through American infrastructure and are subject to American processing fees. The European Payments Initiative, backed by major European banks, aims to build a genuinely European alternative for card and mobile payments, though earlier attempts at this, such as the Franco-German Monnet project, struggled to gain traction and folded.

The core challenge is a familiar one in payments: convincing merchants and consumers to switch away from a system that already works everywhere. Success likely requires either regulatory nudges (such as requiring acceptance of European payment rails alongside international ones) or a genuinely superior user experience, rather than sovereignty appeals alone.

A Digital Euro

The European Central Bank has been developing a digital euro, a central-bank-issued digital currency intended to give Europeans a payment option that doesn’t depend on private, often non-European, payment processors, and that would function even if commercial card networks were disrupted or withdrawn. It would also serve as a public, sovereign alternative to whatever digital payment ecosystem private tech companies build around cryptocurrencies or stablecoins.

The project faces genuine public skepticism, particularly around privacy — many Europeans worry a central bank digital currency could enable more granular government tracking of personal transactions than physical cash allows, and the ECB has had to design privacy safeguards specifically to address this concern. Getting that trade-off right, rather than rushing deployment, will likely determine whether the digital euro succeeds as a trusted payment option or is met with public resistance.

Growing the Venture Capital Market

European venture capital has grown substantially over the past decade, but still raises a fraction of what American venture markets do, which is a major reason successful European startups frequently seek later funding rounds from American investors, and sometimes relocate headquarters or listings across the Atlantic as a result. This isn’t simply a capital shortage — it also reflects more fragmented exit markets (fewer large European tech IPOs) and pension fund regulations in several member states that limit institutional investment in venture asset classes.

Growing this market ties directly back to the Capital Markets Union: unified securities rules, deeper stock exchanges willing to list high-growth tech companies, and pension reform that allows more institutional capital into venture funds would all expand the pool of European money available to European startups, reducing how often “graduating” to serious growth capital means leaving Europe altogether.

Conclusion

Financial independence differs from most of the other sectors in this series because the dependency isn’t the result of a hostile actor’s deliberate leverage — it emerged because American markets built deeper liquidity, more unified rules, and larger risk capital pools than Europe has managed to assemble across 27 separate systems. That means the fix is largely internal: complete the Capital Markets Union, and a stronger euro, more competitive payment systems, and a larger venture capital market become far more achievable as a result, rather than five separate battles fought