Repeats to additional subscribers without any changes. The opinions expressed here are those of the author, a columnist for Reuters.

By Mike Dolan

LONDON, June 11 (Reuters) - A year since European Central Bank chief Christine Lagarde's clarion call for a "global euro" to protect against fraying Transatlantic ties, Europe has failed to materially bolster its financial and investment autonomy. For some, it must now pick the low-hanging fruit - issuing more joint European Union bonds.

Lagarde has more immediate things on her mind on Thursday as the ECB is set to raise interest rates to choke off the inflation impact of the Iran-related oil shock.

But the report card on the first year of the global euro push is disappointing. The ECB itself showed last week that very little has changed in terms of euro usage or its place in world reserves despite a year of opportunity. And even though euro-denominated global debt sales have risen to a new record, ongoing political disagreement remains a hurdle to more action.

"A stronger international role for the euro will not come about by itself," ECB board member Piero Cipollone said last week, adding Europe needed to act deliberately to achieve it.

Fragmentation across the bloc in critical areas prevents it from deploying its considerable economic weight in an increasingly dangerous and divided world.

The political optics around its joint defense agenda, for example, looked poor this week as Germany and France scrapped a landmark project to ​build a new-generation fighter jet in favor of other initiatives.

On the financial side, the centerpiece of EU plans is the much-touted Savings and Investment Union. It aims to break down intra-EU regulatory barriers and overlapping national supervisory systems to help channel huge pools of domestic cash savings - some €33 trillion ($38.11 trillion) at last count - into investment and retirement vehicles that can then target key innovation and security priorities.

But persistent national objections have slowed progress and forced the "E6" - the six biggest EU economies - to push ahead on their own late last month as a vanguard. That has created doubts about the speed of a bloc-wide push.

To be sure, there has been more convincing movement in specific areas to bolster the euro's external role. Plans for a digital euro are well advanced, and the ECB in February opened up access to euro liquidity to more countries, making it cheaper and easier to obtain in an effort to enhance the currency's international role.

But initiatives like these are relatively small building blocks.

'BLUE BOND' TRIAL BALLOON

One obvious way to shift the dial would be for euro zone members to get more serious and ambitious about expanding joint sovereign bond offerings.

Doing so would help overcome persistent doubts about the fragmented euro government bond market, create a sizeable "safe asset" as a bedrock for EU-wide investment and attract investors from outside the bloc.

Despite ongoing political resistance in Germany and elsewhere to joint euro debt sales, there's widespread support within the ECB for some way to expand the pool of safe assets.

Only last month, the International Monetary Fund urged European governments to treat innovation, energy and defence as EU-wide public goods that should be funded through joint borrowing, much as joint EU bonds were used for post-pandemic investment programmes.

Many proposals on how to expand the pan-EU bond market have come and gone over the years. One, however, has caught the eye of policymakers in the past year and been presented again by the authors over the past month.

Last June, a paper penned by former IMF chief economist Olivier Blanchard and senior Citadel executive Angel Ubide proposed switching national debt worth up to a quarter of each member country's GDP for jointly guaranteed and more senior "blue" euro bonds.

Instead of dwelling on the thorny issue of credit sharing that dominated discussions during the euro debt crisis more than 10 years ago, it focuses on how to scale up the market to offer a viable rival to U.S. Treasuries.

That's a whopping task as there is only about a trillion euros of joint debt outstanding at the moment. But the paper reckons the blue bond idea could increase that fivefold.

In re-publishing their proposal last month with a Q&A, Ubide and Blanchard said the case for boosting the joint euro bond market was even more urgent now than a year ago, with doubts about NATO's future making strategic autonomy a critical priority and growing interest in the plan within the ECB.

"European leaders must be upfront about it: If they choose not to boost the Eurobond market, they are choosing higher financing costs, lower potential growth, and weaker strategic autonomy," they concluded, adding simply that "Time is up."

The political omens for adopting such a plan, or even backing another wave of joint debt issuance in some other format any time soon, are not great.

But if the ECB is unable or unwilling to get its governments on board with moves like this, it may be doomed to writing dour annual reports on euro usage for years or decades to come.

(The opinions expressed here are those of Mike Dolan, a columnist for Reuters.)

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