Will the Euro Ever Replace the US Dollar as the Dominant Global Currency?

There are two major handicaps that will make very difficult for the euro to overtake the US dollar as a dominant currency. First, the EA still has a very fragmented banking and capital market, which makes it more difficult to fully exploit economies of scale and of scope and network externalities. The second is that since the EU and the EA are only unions of independent nations and not a federal state, it will be extremely difficult to overtake the US dollar and maintain a dominant international role while the governance of the EU and EA remains unchanged.