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Euro’s Safe-Haven Status Grows, But Long-Term Stability Needs Structural Reform: S&P Analyst
The euro’s growing appeal as a global safe-haven currency signals a promising shift for Europe’s economic role on the world stage. However, according to Sylvain Broyer, Chief EMEA Economist at S&P Global Ratings, the momentum is far from guaranteed without substantial economic reforms and a stronger focus on domestic demand.
In a commentary published exclusively for Euroviews, Broyer emphasized that while recent market behavior reflects increased confidence in the euro during times of financial uncertainty, sustaining that trust requires more than fiscal stimulus packages. “Being viewed as a safe haven is not always a positive—it brings responsibility,” he noted, urging Europe to reconfigure its growth model to become more self-reliant.
Currently, the euro comprises only 20% of global foreign exchange reserves, compared to 58% for the US dollar. Though the euro is strengthening and trading closer to its fair value of around $1.15, Broyer warns that maintaining or improving this position hinges on significant policy shifts, particularly a move toward boosting domestic consumption over export reliance.
Europe’s deep-rooted dependency on global trade, especially with a trade model shaped by decades of adherence to the Washington Consensus, leaves it vulnerable. Should the US further restrict imports, Europe could face intense competition from Chinese products redirected toward European markets. China’s edge in production efficiency, regulatory flexibility, and technological development could pose a serious challenge.
To safeguard against this, Broyer advocates for expanding Europe’s domestic economy while preserving its commitment to free trade. He points to Germany’s stimulus efforts and rising EU-wide defence spending as initial steps in the right direction. Together, these initiatives could lift the eurozone’s GDP by up to half a percentage point annually by 2028—an impactful change for a region where growth typically hovers around 1.2%.
Still, the economist warns that Europe’s limited fiscal capacity, constrained by budgetary rules and a relatively small EU budget, will require more than short-term spending to achieve long-term resilience. “Reforms must begin with dismantling internal trade barriers,” Broyer said, citing IMF research indicating that aligning Europe’s internal trade efficiency with US interstate levels could boost per capita GDP by 7%.
Further gains could come from fully realizing the EU’s proposed Savings and Investment Union (SIU). OECD data suggests that even modest increases in market capitalisation could raise per capita GDP by 2.5%, improving investment in innovation and reinforcing the continent’s competitive edge.
Ultimately, Broyer concluded, the euro’s emergence as a reliable safe haven depends not only on short-term fiscal tools but also on deep, structural reforms. These would enhance the EU’s ability to withstand global shocks and reduce dependence on the US dollar—offering a path to a more autonomous and robust economic future.
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Suspected Drone Strike Hits UK Base in Cyprus Amid Escalating Iran Conflict
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Cruise Passengers Stranded Amid Escalating Middle East Crisis
The Persian Gulf is currently characterised by hostilities. The Strait of Hormuz is closed to shipping, with only vessels connected to China or Russia allowed to pass. The escalating crisis in the region has left thousands of tourists stranded on cruise ships and disrupted air travel.
On Sunday afternoon, a missile struck the water near the Mein Schiff 4, operated by TUI Cruises, while the ship was docked in Abu Dhabi, United Arab Emirates. Clouds of black smoke were reported over the water, according to the Bild newspaper. The vessel carries approximately 2,500 passengers and 1,000 crew members, with many due to return to Germany from Dubai. The situation on board is tense, and it is not yet clear if anyone was injured.
Security measures on the ship remain strict. Passengers are prohibited from entering outside decks, are advised to avoid windows, and receive regular alerts on their smartphones about potential incoming missile threats.
A sister ship, Mein Schiff 5, berthed in Doha, Qatar, is also affected. Passengers attempting to fly home from Doha on Saturday were forced to return to the ship after flights were canceled. Many had already boarded aircraft and had to leave luggage at the airport, waiting around ten hours before being taken back to the ship in the evening.
Other cruise lines are similarly affected. Six vessels are currently docked across ports in Dubai, Abu Dhabi, and Doha. These include the MSC Euribia from MSC Cruises, the Celestyal Discovery and Celestyal Journey from Celestyal Cruises, and the Aroya from the Saudi operator Aroya Cruises.
The closure of airspace in multiple countries in the region has compounded the situation, preventing passengers from flying home. Thousands remain stranded, unsure when they will be able to continue their journeys or be evacuated safely.
The crisis follows US and Israeli strikes in the region on Saturday, which prompted retaliatory attacks by Iran targeting military positions in the Persian Gulf. Cruise passengers, many of whom expected a calm holiday, have instead faced a sudden escalation in regional tensions.
Authorities in ports and embassies are coordinating with shipping companies to maintain safety and provide updates, but the rapidly evolving security situation has made evacuation and travel plans uncertain. Tourists are advised to follow official guidance and avoid unnecessary movement on or around their vessels.
The disruption highlights the wider impact of escalating hostilities in the Gulf, affecting not only commercial shipping but also tourism and international travel. Passengers on affected cruise ships and flights face prolonged delays as authorities work to stabilize the situation and ensure safety in the region.
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Azerbaijan Commemorates Khojaly Massacre with New Memorial and National Ceremony
Azerbaijan held nationwide commemorations on Thursday to mourn the hundreds of civilians killed in February 1992 in the town of Khojaly during the Karabakh conflict with Armenia. President Ilham Aliyev led the ceremonies, inaugurating a new Khojaly Genocide Memorial Complex in Baku to honor the victims of what he described as “the greatest tragedy for the Azerbaijani people.”
Thousands of people gathered at the Khojaly Massacre Memorial in Baku for the National Day of Remembrance. A minute of silence was observed across the country as citizens paid tribute to those who lost their lives over 30 years ago.
Azerbaijani authorities state that 613 civilians, including women and children, were killed when Armenian forces, with the support of the former Soviet Union’s 366th Guards Motor Rifle Regiment, attacked Khojaly. Dozens more were reported missing or injured during the assault, which occurred amid the war between ethnic Armenian forces backed by Armenia and Azerbaijani troops over the Karabakh region and surrounding areas.
Human Rights Watch conducted its own investigation into the incident, attributing direct responsibility for the civilian deaths to Karabakh Armenian forces. Armenia has repeatedly denied the accusations, arguing that the reported death toll was exaggerated and that casualties resulted from fighting between the two sides.
Despite differing accounts, the Khojaly tragedy remains a deeply significant event in Azerbaijan’s collective memory. Commemorations continue to emphasize the human cost of the conflict and the impact on generations of Azerbaijanis.
This year’s ceremonies took place against the backdrop of a peace and reconciliation process between Azerbaijan and Armenia. Both nations have pledged to work toward a more stable and peaceful future following decades of conflict and suffering on both sides.
President Aliyev emphasized the importance of remembering the past while looking forward. The newly inaugurated memorial complex aims to provide a permanent site for reflection, ensuring that the victims of Khojaly are remembered by future generations.
The National Day of Remembrance has become a focal point for public reflection and national unity, drawing participants from across Azerbaijan. Observers note that the ceremonies serve both to honor the victims and to reinforce awareness of the historical and ongoing challenges in the Karabakh region.
Over 30 years after the massacre, Khojaly continues to hold a central place in Azerbaijani history. Thursday’s events highlighted the nation’s efforts to commemorate the past while supporting dialogue and cooperation with Armenia to foster lasting peace in the South Caucasus.
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