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The study argues in favour of the introduction of a digital euro because of its benefits for the public’s store of value and cashless payment options. It questions the assumption that caps on digital euro holdings would be necessary in the interest of financial stability and favours an approach that allows everyone unlimited access to digital euros.

This study assesses the first two ECB progress reports on the digital euro. It is socially desirable to have a digital euro. However, the envisaged design of the digital euro makes the use case for a digital euro from consumers’ point of view questionable, in part because it will offer less convenience than other, commercially provided, digital means of payment. This study lays out some desirable design features of a digital euro that can foster broad adoption.

This paper assesses the state of preparation for the possible launch of a digital euro. It focuses on the main relevant aspects: market impact, implications for banks, design and technical issues, monetary policy, financial stability, the role of fintech and Big Techs, international dimensions, privacy, and financial inclusion. On each, brief recommendations for the ECON Committee’s work are offered. The concluding judgment is broadly positive on the preparatory work but doubtful on the wisdom of ...

This briefing provides a summary of all scrutiny activities of the European Parliament related to euro area monetary policy in the period between the November 2022 and March 2023 , along with a recap of the key monetary policy decisions taken by the European Central Bank’s (ECB’s) Governing Council in that period. These kind of summaries are published regularly after each Monetary Dialogue (MD) with the ECB.

The Commission’s reform orientations propose that debt sustainability analysis (DSA) should serve as an anchor in EU fiscal rules. After discussing the main assumptions of DSAs in projecting public debt ratios, we analyse four critical aspects in designing such a reform: making judgement calls with regard to DSA assumptions; ensuring transparency and democratic legitimacy; promoting public investment in the context of climate goals; and tackling cross-border effects of fiscal policy, in particular ...

24 February 2023 marked one year since the start of the Russian invasion of Ukraine. Before the war, starting in 2021, the euro area was experiencing inflationary pressure attributed to supply-side factors, in particular to pandemic-related supply chain disruptions. The war in Ukraine amplified inflationary pressures through energy and food prices, later feeding into goods and services inflation. Later in 2022, the relative contribution of demand-side factors became more prominent. With the recent ...

The term "quantitative tightening" refers to the process of decreasing the central bank's balance sheet through a reduction of asset holdings acquired during "quantitative easing". Over the years, the Eurosystem acquired a substantial portfolio of assets as part of its asset purchase programmes. While the European Central Bank (ECB)'s Governing Council decided already in 2022 to stop net purchases, reinvestments of principal repayments continued until March 2023, thus maintaining the exisiting stock ...

This note provides an overview of the implementation of the 2022 recommendation on the economic policies of the euro area proposed by the Commission and agreed by the Council. It makes use of public information and proxies such as on how the Eurogroup has integrated euro area recommendations’ concerns in their “thematic discussions” and work programmes. This note will be updated in light of relevant developments.

This note looks at the 2023 recommendation on the economic policies of the euro area proposed by the Commission and agreed by the Council. The note provides a review of the euro area recommendations from an institutional perspective and includes broad comparisons to earlier recommendations, in order to illustrate how policy concerns have evolved over time. This note is an update on a previous version and will be updated in light of relevant developments.

Inflationary pressures in the euro area slightly eased over the last few months, mainly due to the decrease in energy prices. However, the core inflation rate still remains well above the ECB’s target. A rise in inflation expectations is still a major risk to further increase in inflation, and thus should be monitored closely. We find that contractionary monetary policy by the ECB and the Fed decreases energy prices and the headline price level in the euro area. This paper was provided by the Economic ...