Dozens of Economists Are Reportedly Urging The EU To”Let Public Interest Prevail” On the Digital Euro

• 68 economists are warning that relying on foreign payment firms threatens Europe’s control over its own currency.
• A public digital euro would guarantee access to central bank money as physical cash use continues to decline.
• Commercial banks are lobbying against the project, fearing they will lose cheap retail deposits to the ECB.

Europe now stands at a crossroads concerning the future of its money and payment systems. A group of seventy economists and policy experts recently sent a call to action to the EU via an open letter. 

In this letter, they urged members of the European Parliament to back a public digital euro to serve the common good. This open letter arrived on Sunday, January 11, amid growing fears over financial independence. 

In all, these experts believe that without a state-backed digital currency, Europe risks losing its monetary sovereignty to foreign tech giants.

The Fight for a Public Digital Euro Option

The letter is titled “The Digital Euro: Let the public interest prevail!,” It pointed out a massive risk, where currently, many European countries rely entirely on international card networks for daily retail payments.

This means that if the EU hesitates, private stablecoins and foreign payment platforms will gain even more power. 

Signatories like Thomas Piketty and José Leandro also argued that a digital euro is a necessary public good. Because of this, they want a payment method issued by the Eurosystem that remains free for basic services.

This new form of money would complement physical cash rather than replace it. It would also ensure that citizens always have access to public central bank money in a digital world. 

Economists warn that inaction will make European merchants increasingly dependent on non-European technology. This dependency could weaken the entire payment system during financial stress.

Risks of Ignoring the Digital Euro Project

Thirteen countries in the euro area currently have no domestic backup for international card networks. The economists pointed out how easily payment access can become a geopolitical weapon. 

Without a strong digital euro, the basic parts of the economy could fall under foreign control. US-backed private digital currencies are already growing across the continent, and this shift puts the most fundamental part of the economy (money itself) at risk.

A robust public system would create a direct link between European citizens and the ECB. It must also work both online and offline to be truly useful.

The experts also demand that the system protect privacy by design. 

It should be available to everyone, even those without a commercial bank account. If private companies are allowed to refuse this currency, the project will likely fail to meet its goals.

Banking Lobby Fights Against the Digital Euro

Not everyone is happy about the trend toward a public digital currency.

The banking industry has pushed back hard against the project, and major lenders like Deutsche Bank, BNP Paribas and ING warned that the plan could hurt private innovation. 

These banks fear that a digital euro will draw money away from traditional savings accounts. If people move their money to an ECB wallet, banks lose a source of cheap and stable funding.

Under current plans, the ECB might even limit individual holdings to €3,000, and lenders argue this change is dangerous for their balance sheets. 

Hans Stegeman, an economist at Triodos Bank, signed the letter despite these industry fears. Hans believes the financial system should serve society first. 

He also argues that a public electronic payment rail is vital for a fair economy. The signatories even warned lawmakers not to let financial lobbying water down the project into a symbolic compromise.

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