The EU’s is concerned to guard against currency fluctuation. The advance funding, against which the guarantee is being given, is in Euro and therefore if any claim (hopefully unlikely) is made then it will also be in Euro. A dollar bank guarantee is dollar linked and may be more or less than the Euro value. We are surprised that this was not clear at the time of signing the contract, and we are fairly sure that the EU requested the guarantee as X amount of Euros. It is unlikely that they will accept anything different. You should discuss the matter with the PO.