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Lawmakers at the European Parliament are struggling to find a compromise position on the design of the digital euro, putting the project’s legislative path in jeopardy, according to three sources familiar with the matter and documents seen by Euronews.
In a meeting on Tuesday, the rapporteurs noted that there is a strong disagreement on the very essence of what the digital euro should look like, making it very challenging to move forward, according to an email exchange seen by Euronews.
“We agreed to disagree,” a person familiar with the matter told Euronews, summarising the essence of the discussion.
According to the agenda from Tuesday’s meeting, the European People’s Party (EPP) rapporteur Fernando Navarrete, who is leading on the file in the European Parliament, made a new proposal on the concept of the digital euro, calling it “e-cash”.
That model would be used only for offline payments and as a “tokenised digital form” of cash, without granting users retail accounts on the European Central Bank (ECB) ledger.
Euronews reached out to Navarrete’s office for comment, but received no reply before publication.
By contrast, the Socialists and Democrats (S&D) and Renew Europe support the European Commission’s proposal, with users holding retail accounts on the ECB’s ledger and using the digital euro both online and offline.
“Europe must own and control its critical infrastructure. At a time of unprecedented geopolitical change, as we witness the dissolution of rules bases international order, payment sovereignty must be anchored in common infrastructure”, S&D shadow rapporteur Nikos Papandreou told Euronews.
The European Parliament is the only institution that has yet to take a position on the file, with leaders at the European Council already agreeing their position last December.
A vote on the file is expected in May at the European Parliament’s plenary session, but divisions between legislators could thwart its passage.
Should the digital euro be approved in the plenary, the European Commission, the European Parliament and the European Council would then negotiate a political agreement.
However, no negotiations among the three can take place until the Parliament agrees on a position.