The Digital Euro and the Future of the European Project
Date Issued
2025
Author(s)
Zafiroski, Jovan, Neshovsksa Kjoseva, Elena
DOI
https://doi.org/10.1007/978-3-031-95068-1_5
Abstract
The creation of the single currency was one of the most important events
in the history of the European integration. The single currency is a milestone in this
process which should foster the economic integration and contribute to strength
ening of the European identity. However, since 2008 and the global financial crisis
the European economy is facing permanent challenges while in certain periods the
very existence of the single currency was jeopardized. In order to deal with the
consequences of the GFC the European monetary authorities have undertaken series
of reforms in the European financial and banking system. Also, an unconventional
monetary policy which included negative interest rates and massive monetary expan
sion though the so-called quantitative easing was implemented. The COVID 19
pandemic forced the authorities to implement even more aggressive monetary policy
which alongside the geopolitical turbulences in the last two years is causing very high
inflation rates. Moreover, the monetary union faces another challenge brought by the
global process of digitalization of the economy and introduction of new technologies
in the realm of money and finance. The process of digitalization of money and the
prospect of creation of the central bank digital currencies offers new prospects for the
European economic and monetary union. The launch of the digital euro might be a
catalyst that will strengthen the monetary union and will foster the economic growth.
However, there are some concerns about the possible negative effects deriving from
the introduction of the digital euro that could undermine the normal functioning of
the monetary union and the European financial system. The text will try to explain
the significance of the launch of the digital euro for both the monetary union and for
the entire project of European integration.
in the history of the European integration. The single currency is a milestone in this
process which should foster the economic integration and contribute to strength
ening of the European identity. However, since 2008 and the global financial crisis
the European economy is facing permanent challenges while in certain periods the
very existence of the single currency was jeopardized. In order to deal with the
consequences of the GFC the European monetary authorities have undertaken series
of reforms in the European financial and banking system. Also, an unconventional
monetary policy which included negative interest rates and massive monetary expan
sion though the so-called quantitative easing was implemented. The COVID 19
pandemic forced the authorities to implement even more aggressive monetary policy
which alongside the geopolitical turbulences in the last two years is causing very high
inflation rates. Moreover, the monetary union faces another challenge brought by the
global process of digitalization of the economy and introduction of new technologies
in the realm of money and finance. The process of digitalization of money and the
prospect of creation of the central bank digital currencies offers new prospects for the
European economic and monetary union. The launch of the digital euro might be a
catalyst that will strengthen the monetary union and will foster the economic growth.
However, there are some concerns about the possible negative effects deriving from
the introduction of the digital euro that could undermine the normal functioning of
the monetary union and the European financial system. The text will try to explain
the significance of the launch of the digital euro for both the monetary union and for
the entire project of European integration.
Subjects
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