The Digital Euro: Aurore Lalucq Is Right, and That’s the Whole Problem
On June 23, 2026, by forty-three votes to fourteen with one abstention, the European Parliament’s Committee on Economic and Monetary Affairs adopted its position on the digital euro. Its chair, French MEP Aurore Lalucq, hailed a “historic day” for the Union’s monetary sovereignty. The plenary vote will follow in early July, then comes the trilogue, and if everything goes to plan, a first issuance is expected in 2029.
On one word, Aurore Lalucq is right. Money is indeed a matter of sovereignty. I would go even further than she does: it is first and foremost a matter of freedom. Hayek defined money in exactly those terms, as the most powerful instrument humankind has ever brought into being to widen its opportunities and protect its property. And it is for precisely that reason that the digital euro will not be money at all. I will try to show this calmly, taking the arguments on the other side seriously, the best of them included, because the subject deserves better than a slogan. This will run a little long, fair warning.
Money Is a Mirror, Never a Lever
To understand why this project strikes me as so dangerous, we first have to remember what money is. Not what we have turned it into, but what it is.
Money is a reflection of the world’s scarcity. That scarcity defines our lives; it explains why we trade and why we save. In this respect money is a singular good on the market. Its role is neither to be consumed nor to help manufacture other goods. Its role is to mirror the relative scarcity of resources, goods, and time, and to broadcast that information to every economic actor in the form of prices. Rothbard called it the nerve center of the economy. He was right. It governs every move made by entrepreneurs, savers, and consumers alike. Everything revolves around the price signal it emits without pause, the signal that lets each of us weigh the opportunity cost of every alternative and so pursue, in our own way, our own happiness.
To perform that function, money must be scarce and neutral. An entire economic system turns around it and must be able to trust it blindly. Here we begin to see why it has to stay beyond the reach of any human organization, because any human organization will sooner or later manipulate and corrupt it. That is the story of fiat money, conjured out of nothing by debt for the benefit of those who gorge on it. The digital euro is simply its final form.
The Digital Euro Reflects Nothing
The digital euro claims to be money. Yet it will reflect nothing real, because its quantity will be decided entirely by the central bank itself, free to print as much as it, and the member states, deem necessary. A thing whose quantity is fixed by decree no longer says anything about the world. It says nothing but the will of whoever decrees it.
The real purpose of the digital euro lies elsewhere. It is the last attempt of a winded European system to stay in power, a system that sees in public money the means to regain a direct grip on individuals and their capital. For the first time, your balance would no longer be a claim on your bank, but a direct claim on the ECB. An account opened, at the very end of the chain, with the very entity that decides the quantity. The shift looks technical. It is anything but neutral.
For money draws its value from remaining stable and dependable over time. That is what lets it carry the fruit of our labor across space and time, and that is what makes it fit for exchange: we accept a payment only because we know it will still be worth something tomorrow. A money whose issuer can adjust its volume single-handedly, to suit the needs of the state, slowly loses that quality. It stops telling the truth and comes to tell nothing but the will of whoever holds it. This, at bottom, is the trap we should have seen coming well before it was voted through, and the question of programmability, which I will return to below, is merely its extension.
The Real Heist: The Deflation AI Owes You
The timing chosen to roll this tool out is anything but innocent. Europe is sliding toward third-world status and sinking into decline while the rest of the world speeds up, not least thanks to artificial intelligence.
And that same artificial intelligence is about to unleash the greatest wave of productivity deflation in history. The logic is mechanical: when you produce more with less, the real cost of things falls. Under sound money, those gains would flow back to everyone in the simplest form imaginable, falling prices and rising purchasing power, with no one having to redistribute a thing. The prosperity of the machine would return to all, because money would be telling the truth.
The system cannot allow that. A natural deflation is prosperity that escapes the center, that passes through no teller’s window and feeds no debt. I am not imputing a conspiracy to anyone here; I am describing an incentive: an institution that can create the quantity at will, and whose entire doctrine is to fight falling prices, will sooner or later do what its reaction function commands. It will flood the market with digital euros to keep prices from falling, and the gains from AI will be captured before they ever reach your pocket. This is the perfect confiscation, the kind that is never voted on, never tallied, never seen, because it deprives you of wealth you never watched arrive.
This is where the real heist lies. Not a brutal burst of inflation on day one, but the methodical capture of a deflation that was owed to you. That is why only money no one can print truly protects the fruit of your labor.
“But They Built In Safeguards”
I will be told, file in hand, that the adopted text is full of precautions. True, and they deserve to be met head-on, because this is the ground onto which the debate is about to move.
The regulation provides for privacy by design, with zero-knowledge proofs, those clever constructs meant to verify a transaction without exposing the person behind it. The ECB would thus have no access to your identity. Except that this privacy seriously covers only the offline mode, money stored on the device, where losing the phone means losing the sum with no refund. The online mode rests on accounts. And accounts can be linked. To the European digital identity, to the EUDI wallet, to the systems now being rolled out. The line between relative anonymity and full traceability is not a guarantee set in stone, it is a dial. And a dial can always be turned. Above all, privacy by design is only an intention, whereas a leak is a fact: I think back to the week the French state lost 1.2 million banking records from its national account registry, FICOBA, to a single stolen password. I am being asked to entrust my payments to the very same hands.
Next I will be pointed to the holding cap, somewhere around 3,000 euros, and to the zero interest it pays. Here again, read the text to the end. That cap will be set by the Commission, on the ECB’s recommendation, and reviewed at least every two years. In other words, nothing stops it from being raised sharply the day a crisis, or a simple political decision, makes that convenient. I have already described this mechanism, the unacceptable revolution sliced into technical increments no one contests. A revisable cap is not a dam, it is a valve.
I will be told above all, and this is the most serious objection, that the text explicitly rules out programmable money. That is correct: neither the ECB nor the regulation provides for restricting where, when, or on what you spend, nor any expiry date whatsoever. On paper, the digital euro is meant to stay as neutral as a banknote, and I was wrong myself, in my early posts on the subject, to present this programmability as a done deal. It is not. But a ban written into a regulation is not a law of nature: what one legislator writes, another rewrites, and it will take only a crisis for a small, well-targeted dose of conditionality to be sold to us as plain common sense. Above all, the ECB carefully distinguishes programmable money, which it excludes, from conditional payments, which it is already testing, from pay-on-delivery to installments: the technical building block for conditionality is being laid right now. We are sworn it will never be used to coerce, exactly as we were sworn about the cap before there were plans to revise it every two years. The real question is not what the text forbids this year, but what the infrastructure will make trivial the day we change our minds.
As for the “sovereign” infrastructure entrusted to OVHcloud on European servers, I gladly acknowledge it, and it is even the only good news in the whole file. At least the ECB is applying to its own money what the banks forgot to apply to Wero, which they built on Amazon’s servers. But make no mistake. Sovereign servers change nothing at the heart of the matter. The problem was never where the machines run. The problem is that the quantity, that part, stays one hundred percent political. No zero-knowledge proof, no cap, no sovereign data center corrects the original flaw: a money whose volume is decided by decree reflects nothing real. All these gadgets answer questions I am not asking.
Sovereignty, the One Argument on the Other Side That Holds Up
There is, however, one argument on the other side that I cannot wave away, and it would be dishonest to pretend it does not exist. It is the argument from sovereignty. Today, Visa and Mastercard account for roughly 61 percent of card payments in the euro area. Two American companies control the tap on a vast share of our transactions, and in recent years we have watched Washington wield access to financial infrastructure as a diplomatic lever. Add the rise of dollar stablecoins, which the American GENIUS Act of July 2025 explicitly encouraged in order to extend the greenback’s empire into digital payments, and the dependence becomes hard to deny. Even the French Senate, which no one will accuse of anti-Europeanism, holds that the only valid objective of the digital euro is to strengthen payment sovereignty, because it answers a dependence rather than a market failure. On that diagnosis, they are right, and I grant it freely.
But a correct diagnosis does not validate just any remedy, and this is where the most convenient confusion of the whole project hides. Reducing our dependence on Visa and Mastercard is a problem of plumbing, of payment rails. And a rail merely carries money that already exists. The digital euro, by contrast, does not just lay a sovereign pipe: it manufactures a new liquid. A previously unheard-of form of central-bank liability, a central-bank euro held directly by every private individual, something that had never existed in two centuries of monetary architecture. You are told about the pipe, the legitimate need, in order to make you swallow the liquid, the deep transformation. That is the whole sleight of hand, deliberately conflating the means of transport with the nature of what flows through it. For one can perfectly well take back control of the pipe without touching the liquid. The sovereign rail, in fact, we already had within reach: it is the CB network, which I defended as the wheel there was no need to reinvent. We could have Europeanized it for a fraction of the cost and the risk, without creating a single new liability. We preferred the Rube Goldberg machine, after draping Wero in the flag of sovereignty only to set it down on Amazon’s servers, and I have already shown how this geopolitical veneer masks a dependence of another kind. Geopolitical dependence justifies a sovereign pipe. It does not justify recasting the very nature of money to make the ECB everyone’s account keeper.
Eighteen Billion Against Four: The Cartel’s War
Then there is the debate that fills the pink pages of the financial press, the one about cost. On one side, a PwC study run on a panel of nineteen large banks puts the bill at eighteen billion euros for the sector. On the other, the ECB counters with four to five point seven billion. The first healthy reflex: follow the incentives on both sides. PwC measures what its banking sponsors want to see inflated; the ECB measures the project it is championing and has every interest in making look modest. Both camps have a direct stake in the number they put forward.
But cost is only a pretext. The banks’ real fear lies elsewhere. If Europeans can store their euros directly at the ECB rather than at a bank, deposits melt away, and with them the capacity to lend and the income from interest. This is disintermediation, and it is why the 3,000-euro cap matters so much in the negotiations: it is the lock that keeps deposits in place.
Except that we have to name this fight for what it is. It is not a contest between private banks that would protect you and a central bank that would threaten you. Do not fall for it. Commercial banks, which conjure credit money out of almost nothing, are part of the very apparatus I am denouncing, not the bulwark of your freedoms. The cap is not a citizens’ safeguard. It is a market-sharing treaty between two factions of the same monetary cartel, fighting over the right to intermediate your money and skim their tithe along the way. You are not a party to the negotiation. You are its object. And above all, neither faction contests the one power that worries me, the power to create the quantity at will. The war of eighteen billion against four pits two camps in perfect agreement on the very thing that had to be refused. It is also why I never believed in the false sovereignty of the CB-plus-Wero ecosystem: we were sold a national alternative that was nothing but an antechamber.
This week, in that same war, the banks lost a round. A detail worth knowing: they even lost it against their own rapporteur. Fernando Navarrete, the MEP in charge of the file, spent months slowing the project down and trying to shrink it to offline-only, before the ECB camp went right over his head. This is far from a Parliament that charged in blindly; it is an apparatus that flattened its own internal floodgates. The match is not over for all that, it merely changes ground: from cost, the debate slides toward the terms, the cap, the calibration, the pilot timeline in 2027. It is in the trilogue, out of sight, that everything will really be decided, and it fits the same timeline of a foretold implosion I described a few months ago.
The Last Lunge of a System That Can No Longer Persuade
Banks against the ECB, eighteen billion against four, cap against cap: while they tear each other apart over splitting the loot, the one question that truly matters is kept carefully out of the debate, the question of sovereignty. For it is in sovereignty’s name that all of this is sold to us. They invoke the sovereignty of the Union, its capacity to stop depending on Visa, on Mastercard, on the dollar. The need is real, as I have said. But to meet it, they are preparing to confiscate another sovereignty, yours, the one you exercised without a second thought every time you held and spent your money with no account to give anyone. You are being offered a trade, your sovereignty as an individual for the sovereignty of the institution, and they are counting on the same word serving for both so that you never notice the swap.
Because at bottom, this urge to steer everything is always driven by the same thing, the fear of losing control. It is the last lunge of a system that can no longer unite, no longer persuade, and that, unable to persuade, chooses to coerce. Aurore Lalucq spoke of a historic day. On this point too, she is right. It is the day Europe, no longer able to produce prosperity, equipped itself with the tool that will let it capture yours. Money was our last space of individual sovereignty. They are turning it into their last instrument of power.