(Bloomberg) -- The European Union wants to boost its position in the global economic stage by strengthening the international role of the euro as it seeks to erode the dominance of the U.S. dollar and to insulate the bloc from financial risks, including American sanctions.In a blueprint presented Tuesday, the European Commission, the EU’s executive arm, outlined how the region can fortify its economic and financial resilience by bolstering the single currency’s architecture and through growing markets like green finance.Calls to boost the bloc’s autonomy gained steam after the U.S. imposed sanctions on Iran that would also punish European banks, companies and people who do business with the Islamic republic. The commission’s plan reflects increasing pressure by member states for the EU to adopt tools that will allow it to pursue its foreign-policy goals with less recourse to an unpredictable U.S. ally.The U.S.’s ability to enforce international sanctions because of the dollar’s power “has seriously affected the EU’s and its member states’ ability to advance foreign policy objectives,” the commission said in its strategy paper. Policy made in Washington has, at times, “compromised legitimate trade and investment of EU businesses.”Volatile AllyThe initiative to boost the role of the euro was first put on the EU’s agenda by former European Commission President Jean-Claude Juncker, who, faced with an erratic partner in Washington, called for steps to shield the region’s economies and currency from volatility elsewhere in the world. It was during Juncker’s term, in 2018, that President Donald Trump pulled the U.S. out of the international accord that restricted Iran’s nuclear program and reimposed sanctions.The U.S. has also crippled one of Europe’s signature energy infrastructure projects, Nord Stream 2, by threatening businesses with sanctions. The American measures are seen as a way to boost U.S. liquefied natural gas exports to Europe while also maintaining the fuel’s transit through eastern European nations that don’t use the euro but are friendly with Washington.“Strengthening the international role of the euro can shield our economy and financial system from foreign exchange shocks, reduce reliance on other currencies and ensure lower transaction, hedging and financing costs for EU firms,” EU Economy Chief Paolo Gentiloni told reporters in Brussels.According to the European Central Bank, the euro remains the second most-used currency in the world behind the dollar. But despite the latest push, there’s little the EU can do in terms of policy or legislative initiatives to meaningfully boost the use of its currency.A main focus for the EU will be to complete flagship projects that will better unify its banking sector and capital markets. These initiatives have stalled, however, often due to entrenched disagreements between governments.Sustainable FinanceYet the EU thinks its landmark recovery fund, designed to help countries rebound from the pandemic-induced recession, could help buttress the euro. The stimulus package will provide 750 billion euros ($905 billion) in grants and loans, raised by jointly backed debt, while a third of these funds will have to be spent toward green projects.“Promoting sustainable finance is an opportunity to develop EU financial markets into a global ‘green finance’ hub, bolstering the euro as the default currency for the denomination of sustainable financial products,” the plan said.In 2019, almost half of all global green bond issuance, including that originating outside the bloc, was denominated in euros, according to the EU’s executive arm, and this figure is expected to rise, as the commission is poised to issue over 250 billion euros in green debt starting this year. The securities are meant to fund EU’s recovery plan.The plan would see the commission raise almost a trillion euros in debt until 2026, making it one of the biggest sovereign issuers in the world with a stellar credit rating. In parallel, “the Commission will further support the development of euro-denominated commodity derivatives for energy and raw materials and will facilitate the emergence of euro-denominated benchmark indices and trading venues covering core sectors, including nascent energy markets, such as hydrogen.”Digital PushAnother development that could also prove a game changer in that area is the ECB’s push for the introduction of a digital euro, the paper said. “Further development of the European digital finance sector will reinforce the EU’s open strategic autonomy in financial services and the capacity to protect the EU’s financial stability and values.”Brexit is also pushing the EU to bolster its financial infrastructure. The commission stepped up pressure on companies to move parts of their derivatives-clearing business from London to inside the EU. It will set up a working group to assess possible technical issues that could pose an obstacle in this regard, it said.“We need a clear step-by-step masterplan that helps key financial sector businesses move from the United Kingdom to the European Union,” said Markus Ferber, a lawmaker in the European Parliament. “A mere ‘wait and see’ approach will not do to bolster European financial markets.”(Updates with official announcement of plan)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.