At its meeting in inclusive format, in Copenhagen on Friday 19 September, the Eurogroup reached agreement on a number of decision-making procedures relating to the digital euro project led by the European Central Bank (ECB).
“After much work, we found a broad consensus” on a balanced solution that fully respects “the mandate and the prerogatives of each institution involved”, said the President of the Eurogroup, Paschal Donohoe, who believes that this partial agreement proves ministers’ “determination” to move forward with the creation of a central bank digital currency for the euro area.
The Eurogroup agreement covers two elements. The first concerns the decision to launch the digital euro, after a test phase lasting a maximum of two years following the adoption of the specific legislative package, and in particular the date on which it will be issued. Before any decision is taken by the ECB, finance ministers will have the opportunity to discuss the deadline and take a position on the timetable, even if, in the mind of the Eurogroup, the question of the timetable touches on the fundamental issue of making the digital euro a reality.
The second element agreed on Friday concerns the procedure for setting a minimum and maximum limit for the portfolio of digital euros held by an individual or company established in the EU. According to Spanish Minister Carlos Cuerpos, a proposal from Slovakia has been accepted whereby Member States will be able to request a review of the limits every year.
“We did not discuss a limit” for the digital euro portfolio, but a mechanism for deciding these issues, stressed ECB President, Christine Lagarde. She welcomed the solution found by the Eurogroup in a format involving countries outside the euro area. And she noted the impatience of the Member States for legislative work to progress as quickly in the European Parliament.
When a decision is taken on this issue, ministers are expected to ensure that the digital euro wallet allows payments to be made without competing with private bank current accounts.
According to Ms Lagarde, the solutions found respond to the “concerns” of those for whom the digital euro is “not just a means of payment”, but also a statement of the “sovereignty” of Europeans, through the Eurosystem’s ability to manage a cross-border infrastructure for payments in digital currency.
The Eurogroup agreement in enlarged format will be forwarded to the Danish Presidency of the EU Council so that it can be transcribed into legal language. It is responsible for leading negotiations on the legislative package that will establish the digital euro. In July, European finance ministers endorsed the Danish authorities’ objective of reaching a political agreement in principle (‘general approach’) by the end of the year (see EUROPE 13676/22).
The European Commissioner for Economy, Valdis Dombrovskis, said that “there is urgency to reach political agreement” in the Council.
Another issue still to be decided is the compensation model that will compensate banks for the costs inherent in setting up the infrastructure underlying the issue and management of the digital euro.
In the European Parliament, legislative work has been delayed, mainly due to the hesitations of the rapporteur, Fernando Navarrete Rojas (EPP, Spanish). This slowness was criticised by the S&D and Renew Europe groups (see EUROPE 13702/19).
See the decision-making process approved by the Eurogroup: https://aeur.eu/f/ij5 (Original version in French by Mathieu Bion)