LONDON (Reuters) - The European Union needs a “masterplan” to move euro financial services from London to the bloc if it wants to expand the single currency’s role in a global economy dominated by the U.S. dollar, a senior EU lawmaker said on Monday. Markus Ferber, a senior member of the European Parliament, said if the EU wants to compete with the greenback, it needs a financial system to match it. “We need a clear step-by-step masterplan that helps key financial sector businesses move from the United Kingdom to the European Union,” Ferber said. He was speaking ahead of Wednesday’s publication of a European Commission paper on promoting the global role of the euro which sets out ways to rely less on the City of London, Europe’s biggest financial centre, after Brexit. “The COVID-19 crisis has highlighted vulnerabilities in the dollar-dominated international financial system,” the commission paper says. “The withdrawal of the United Kingdom from the EU strengthens the need to further deepen the Union’s capital markets.” The paper recommends better enforcement of EU sanctions, and making EU-based financial market infrastructures less vulnerable to unilateral sanctions from third countries. EU-based securities depositories Clearstream and Euroclear, and messaging services like Swift were affected by President Donald Trump’s actions against Iran. Euro-denominated trade in debt securities, commodities and other instruments should also be encouraged, the paper said. Reform of EU “MiFID” securities and benchmark rules should aim to help euro-denominated energy indices emerge, and increase the attractiveness of euro bonds and shares, it said. The EU executive and the European Central Bank will also review policy, legal and technical issues emerging from a possible digital euro. The Commission, ECB and the bloc’s banking and markets watchdogs will work with industry to assess “possible technical issues” related to shifting derivatives positions from London to the EU, the paper said. The paper could make it less likely that the EU will grant UK financial services access to the EU beyond the temporary access it has granted for derivatives clearers to mid-2022. Some 6.5 billion in euro share trading switched from London to the bloc overnight on Jan. 4 and City officials do not expect this to return, with swaps trading by EU investors also under pressure to leave. “A related source of risk is the excessive reliance of EU banks on foreign exchange swap markets,” the paper said. When looking at company takeovers, the Commission would also check whether they make an EU company “more prone” to complying with sanctions from third countries, the paper said. There is also a need to cut the bloc’s “excessive reliance” on foreign investment banks and funding in foreign currencies, it said.