MEPs of the European Parliament’s Committee on Economic and Monetary Affairs (ECON) debated, on Tuesday 28 November, the Commission’s proposal on the digital euro (see EUROPE 13211/11). Luděk Niedermayer (EPP, Czech) said that Parliament was currently preparing an opinion on the proposal.
The question of added value
Four speakers were invited to share their expertise, in the presence of the rapporteur, Stefan Berger (EPP, German).
Ignazio Angeloni, professor at the European University Institute in Florence, had reservations about the contribution of the digital euro to European strategic autonomy and payment services. He said that the use of physical money was declining: it was not disappearing, but simply becoming rarer for certain uses.
For Mr Angeloni, the digital project would above all break one of the rules governing the proper functioning of regulation.
In his view, the European Central Bank (ECB) would become both a digital currency supervisor and a market player. He is concerned that the ECB will distort the payments market in favour of the use of digital euros.
Liberalisation of banking services
This contrasts with the position of Miguel Fernandez Ordoñez, an economist and former governor of the Bank of Spain, who believes that the ECB is primarily responsible for the digital euro register.
For Mr Ordoñez, the digital euro project would have a positive effect on the economic system and would solve the problem of bank deposits.
“Bank deposits are a promise to return money. The digital euro is money”, he added.
For him, the banking sector is the most protected sector of the economy. The digital euro would make it possible to liberalise the services offered by banks by stimulating competition and forcing them to change their model. This would make it possible to achieve true European monetary union.
He admitted that it would therefore be necessary to “help the losers”, in particular by helping them to separate payment and economic financing activities.
Concerns over credit financing
Marieke Van Berkel, Head of Department at the European Association of Cooperative Banks (EACB), expressed concerns, particularly for financial stability.
Ms Van Berkel felt that the digital euro project would pose a problem for the constitution of bank deposits, which, she pointed out, are an important source of credit financing.
She added that the problem would be exacerbated in times of crisis, when consumers are looking for certainty, and that this would affect banks’ ability to meet their prudential ratios.
Faced with this risk, she said that the added value of a digital euro was limited at a time when other payment proposals, such as instant payments, were emerging.
Marieke Van Berkel also stated that the digital euro would not necessarily strengthen Europe’s strategic autonomy when it came to payments, and that there was no provision in the Commission’s proposal that would prevent a non-European company from offering digital euro wallets.
Ms Van Berkel questioned whether such a project fell within the ECB’s mandate.
In any case, she is in favour of ceilings on the holding of digital euros. The rapporteur, Mr Berger, was in favour of such a provision.
An accessible digital public currency
Finally, Vicky Van Eyck, Executive Director of Positive Money Europe, welcomed the European Commission’s proposal to make the physical euro a legal tender.
However, she said that the Commission’s ambition had diminished under pressure from the banks. For Ms Van Eyck, the Commission started out with the objective of proposing a universally accessible digital public currency, only to end up proposing an alternative means of payment, making the project less attractive to the public.
She calls on legislators to raise the level of ambition and offer a digital euro with a high level of confidentiality, accessible through public intermediaries.
Vicky Van Eyck is in favour of there being no ceiling on digital holdings of euros, or of the ceilings being lifted gradually to give the banks time to prepare.
Report on the ECB
That same afternoon, MEPs from the ECON committee adopted the draft 2023 report on the ECB. The amendments concerned reminders of the ECB’s mandate and independence, as well as its democratic accountability, notably to the European Parliament.
The rapporteur, Johan Van Overtveldt (ECR, Belgian), had initiated a letter calling for the digital euro project to be put on hold (see EUROPE 13259/12).
Link to the draft report on the ECB: https://aeur.eu/f/9ta
Link to amendments: https://aeur.eu/f/9t8 (Original version in French by Émilie Vanderhulst)