The proposed digital euro is encountering fresh delays in the European Parliament, primarily due to Spanish lawmaker Fernando Navarrete Rojas from the European People’s Party (EPP), who has allied with far-right factions. As a result, the shadow rapporteurs have struggled to establish a workable majority on the draft legislation.
A recent compromise, which was reviewed by Euronews, appears to limit the project’s scope, potentially undermining the European Commission’s original intentions.
Brussels had envisioned a digital currency operable both online and offline. However, Navarrete is advocating for a model that functions solely offline.
In his role as Rapporteur, Navarrete’s responsibilities include leading the legislative draft and fostering consensus among various political factions through negotiations. This approach aims to cultivate a stance that a majority in Parliament can rally behind.
There seems to be widespread backing for a digital euro within Parliament. On February 10, lawmakers approved the European Central Bank’s annual report and endorsed two amendments promoting digital currency, despite facing some resistance from centrist and far-right members.
The EPP itself is divided on the issue. The German delegation, under increasing pressure from Berlin, shows strong endorsement for the initiative. Recently, Deputy Prime Minister Lars Klingbeil remarked that opponents of the digital euro are jeopardizing Europe’s future.
According to two sources who spoke with Euronews, the revisions proposed by Navarrete in this latest compromise haven’t bolstered support for the Commission’s agenda, leading to a legislative deadlock.
Euronews made attempts to contact Rapporteur Navarrete for his input, but no response was received prior to publication.
The deadlock reemerged during a meeting on Thursday, where legislators were trying to reconcile their differences amidst intense discussions, stating that “the document is going nowhere.”
An additional meeting is set for March 10, but officials anticipate the vote originally scheduled for May will likely face delays.
EU nations have reached an agreement within the Council; however, without approval from Parliament, the legislation cannot advance.
What is the digital euro?
The concept of a digital euro has gained new political relevance as economic tensions between the EU and the US highlight Europe’s reliance on American payment systems.
Companies like Visa and Mastercard, both based in the US, play a significant role in daily card transactions across Europe. Data from the ECB suggests that these networks are responsible for 61% of card payments in the EU and nearly all cross-border transactions.
This initiative aims to introduce an electronic form of cash issued by the European Central Bank, intended to complement physical banknotes and payment solutions from commercial entities.
Advocates argue that this would provide citizens direct access to digital “public” money, which is predominantly represented as cash today.
According to the European Commission’s proposal, users would manage a digital wallet enabling payments online and offline, featuring untraceable transaction capabilities.
However, some critics express concern that the latest compromise in Parliament could dilute essential elements of this vision.
Laura Casonato, the policy head at Positive Money Europe, commented to Euronews that Navarrete’s initial compromise does not clarify his shift towards a digital euro.
Mr. Casonato acknowledged some positive aspects in the proposed legislation, including clearer guidelines on privacy and data security, and language emphasizing that the digital euro “should be a sovereign and secure digital payment instrument that protects individuals’ access to central bank funds.”
