Digital Euro: A Plea from Europe's Top Economists

More than seventy leading economists from across Europe have called on the European Parliament not to give in to pressure from the financial sector and to speak out in favour of the introduction of a digital euroThis plea came about through an open letter, an initiative of the Sustainable Finance Lab, based in the Netherlands.

These economists, from various eurozone countries, express concern about the political negotiations surrounding the digital euro. They believe these negotiations risk undermining the digital euro, making Europe more dependent, less resilient, and more vulnerable to geopolitical tensions.

This call comes at a time when couches in the European Union are opposing the introduction of a digital euro for fear of losing deposits and competition with their own digital payment options.

In December, the governments of the 27 EU member states already agreed to introduce a digital currency by 2029. The next step is approval by the European Parliament, where doubts still exist. However, this approval is essential for the project to become a reality.

The economists highlight that in thirteen eurozone countries, everyday retail payments are entirely dependent on international card networks, with no robust domestic alternative.

This reliance on foreign—primarily American—payment providers exposes European citizens, businesses, and governments to geopolitical pressure, commercial interests from outside Europe, and systemic risks beyond Europe's control, the economists write in their letter.

Without a fully-fledged digital euro, this dependency will only increase as US-backed private digital currencies gain ground. Europe risks losing control over the most fundamental element of our economy: our money.

The authors warn that policymakers must not give in to the short-term interests of the financial lobby. "The digital euro must not become a symbolic compromise. We may not get a second chance," they warn.

Question and answer

Question 1: What is the main message of the economists' open letter?
The economists call on the European Parliament to speak out in favor of the introduction of a digital euro and not to succumb to pressure from the financial sector.

Question 2: Why are economists concerned?
They worry that political negotiations could undermine the digital euro, making Europe more interdependent, less resilient and more vulnerable to geopolitical tensions.

Question 3: What is the economists' position on the dependence on foreign payment providers?
The economists believe that this dependency exposes European citizens, businesses, and governments to geopolitical pressure, commercial interests outside Europe, and systemic risks beyond Europe's control. They advocate for a fully-fledged digital euro to reduce this dependency.