The worth of the general public digital euro | Economy | EUROtoday

The digitalization of the economic system brings benefits but in addition essential dangers. Until not too long ago, residents and corporations have had a public and free fee system, by using money (notes and cash), which within the euro zone has been assured by the European Central Bank (ECB) and the nationwide central banks.

Digitalization is producing a rising privatization of fee programs and, consequently, a critical threat of dropping the free service accessible to all.

The adjustments are accelerated. In Spain in 2024, shoppers made nearly 3 times extra on-line funds than in 2019. 51% of those operations have been carried out by card and 26% by different digital means, in keeping with the Bank of Spain.

This digitalization course of includes a number of challenges: one, alternative of a free, public technique of fee with non-public devices with prices and their very own pursuits; two, lack of European financial sovereignty (playing cards, primarily Visa and Master Card, and different fee devices similar to Apple Pay and Google Pay, belong to American mother or father firms, which can cease offering the service) and three, lack of competitiveness because of the excessive price of commissions on card funds. To start with, solely EU firms have been preselected for the digital euro.

There is a misperception of what free service entails. The price of the playing cards is just not restricted to what their customers pay, about 60 euros per yr. What is related are the excessive commissions which are charged to companies in contracts with typically leonine clauses which are handed on to clients.

Given this case, in 2019 the ECB and the central banks started work to create the digital euro. In 2023, the European Commission authorized a proposal for a regulation whose important traits have been authorized by the Council final December. The foremost concept is that the digital euro has the identical traits as money, that’s, that it’s public, free and accessible to everybody.

Piero Cipollone, member of the Executive Council of the ECB, defined on the sixth that it’s about finishing up one of many foremost duties outlined within the Treaty: “providing legal tender means of payment and issuing money as a public good.”

The matter is being debated within the European Parliament. The draft report, ready by MEP Fernando Navarrete, (PP), circumstances the net model of the digital euro to “the absence of a pan-European sovereign solution for private minority payments.” Clear help for the non-public sector. However, there’s a majority within the European Chamber of social democracy, the left and a part of the PP (Italy and Germany) that helps the theses of the Commission and the Council that defend a public digital euro.

This is a crucial step. But, as Professor Juan Torres has warned, the measure may be very inadequate: “The European monetary union lacks the requirements (in particular, a common treasury and fiscal policy) that are essential for a single currency.” Trump’s strain might drive the mandatory response from the EU.