Over 60 economists are urging European lawmakers to support the digital euro. They warn that without it, Europe could lose control over its own finances and become overly dependent on US tech companies. Prominent figures like Thomas Piketty, a French economist, emphasize that a public digital euro is vital for maintaining European sovereignty and stability.
The European Council backs the European Central Bank’s plan to launch a digital cash equivalent by 2029, but it needs the approval of a majority in the European Parliament, which remains uncertain.
Many economists argue that Europe leans too much on US payment systems like Visa and PayPal, which exposes it to external risks. Thirteen countries in the eurozone currently lack their own digital payment systems. This dependence raises concerns about security and financial resilience.
The letter sent to EU lawmakers highlights the stakes. “Without a strong digital euro, Europe risks losing control over its essential financial systems,” they state.
Yet not everyone is on board. Various European banks, including Deutsche Bank and BNP Paribas, argue against the project, calling it overly complex and costly. They fear a digital euro could diminish private banking efforts in Europe.
Fernando Navarrete, a Spanish Member of the European Parliament, also seeks a more limited version of the digital euro. Meanwhile, bank leaders worry about losing deposits from retail clients if consumers turn to the digital currency.
Hans Stegeman, chief economist at Triodos Bank, one of the organizations behind the economists’ letter, believes the concern stems from banks wanting to keep their steady deposits. The proposed plan allows individuals to hold up to €3,000 in a digital wallet, which would not be available as cash deposits in traditional banks.
“This digital system is about serving society, not just the financial sector,” Stegeman asserts. With the growing digital landscape, the need for a robust public electronic payment system is becoming increasingly clear.
The conversation around the digital euro isn’t just an economic issue; it’s about ensuring autonomy and security in a digital age. As more consumers move towards online payments, the urgency for Europe’s own digital currency becomes more pronounced.
For further insights, you can check out the open letter here.
With the ongoing discussions and debates, the stakes for the digital euro are higher than ever, shaping Europe’s financial future in a rapidly evolving world.
