EU in panic mode as three major projects lined up to save crippled eurozone

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The bloc will commission three projects to consolidate the eurozone over the next twenty years. The three projects will be a banking union, a central bank digital currency, and a reform of budgetary rules within the bloc. Twenty years after its birth, the single currency still needs to be strengthened.

One of the projects will be a reform of the bloc’s budgetary rules.

Brussels maintains that the eurozone cannot function without explicit budgetary rules and a certain budgetary discipline.

Another project will be the establishment of a genuine banking and capital market union.

A third project will be the launch of a central bank digital currency, the digital euro.

Speaking about the euro Emmanuel Jessua, Director of Research at Rexecode said: “The euro has become a relatively stable system: no one has an interest in leaving it because the cost would be prohibitive, especially for the most fragile economies.

“We are therefore engaged in an economic and political construction that is difficult to reverse.

“But at the same time, it is still a sub-optimal monetary zone, where a common monetary policy coexists with 19 sovereign and poorly coordinated economic policies.”

Public debt levels within the bloc have exploded.

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The is a lingering fear within the EU that the countries of the North fear will have to pay the debt of the countries of the South.

Last summer, the European Central Bank (ECB) launched a two-year experiment to determine the shape and functioning of the euro digital currency.

Delivery of the euro digital currency could happen within the next five years.

The digital euro will be issued directly by the ECB and will be held in an ECB account to be distributed by private banks.

The technical and political architecture to deploy the new digital currency needs to be built.

The bloc needs to make EU citizens confident to use the new digital currency and to feel secure when making transactions.

There have been concerns raised over privacy issues where consumer data can be accessed at an unprecedented level by authorities.

Additional reporting by Maria Ortega.

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