Business

Digital Euro Moves Closer as Europe Weighs Payments Future

Published

2 hours ago

May 1, 2026

The European Union is moving toward one of the biggest changes to its payments system in decades, with the proposed launch of a digital euro potentially arriving by 2029. But before that can happen, lawmakers must overcome growing resistance from banks, privacy campaigners and some members of the European Parliament.

The digital euro would function as electronic cash issued by the European Central Bank, designed to complement physical banknotes rather than replace them. Under current plans, consumers would use a digital wallet for everyday purchases, both online and offline. Transactions made offline would offer a high degree of privacy, similar to cash.

If legislation is approved by the end of 2026, the new payment system could be available to consumers three years later.

The project has taken on added urgency as Europe seeks greater financial independence. American companies Visa and Mastercard currently dominate card payments across the eurozone, accounting for most cross-border transactions. European officials see the digital euro as a way to reduce reliance on foreign payment providers and strengthen the bloc’s monetary sovereignty.

The proposal also comes as private digital currencies gain ground globally. While the United States is moving to regulate privately issued stablecoins and China has already rolled out its digital yuan, Europe is pursuing a state-backed alternative under strict public oversight.

Commercial banks, however, have voiced strong concerns. They argue that a digital euro could draw deposits away from traditional banks by allowing consumers to hold money directly with the central bank. Banking groups also warn that granting the digital euro legal tender status would force merchants to accept it, potentially disadvantaging private payment services.

Supporters counter that this is precisely the point. They argue that public money must remain available in digital form, just as physical cash is today.

The debate has become especially intense in the European Parliament, where Spanish lawmaker Fernando Navarrete Rojas is overseeing the legislation. Navarrete has expressed skepticism about the project, questioning its urgency and arguing that private-sector solutions may be more efficient.

His efforts to limit the digital euro to offline use only, a move that would significantly reduce its scope, were ultimately dropped after opposition from other political groups. Socialists, liberals, Greens and left-wing lawmakers have broadly supported the European Commission’s proposal.

Despite the disagreements, negotiations are progressing. A committee vote is expected by the end of June, followed by a full parliamentary vote at a later date.

If approved, the legislation will move into final negotiations between the Parliament, the European Commission and EU member states. Those talks are expected to continue through 2026, setting the stage for a digital euro that could reshape how millions of Europeans pay for goods and services.

Business

Federal Reserve Holds Rates Steady as Middle East Conflict Clouds Economic Outlook

Published

1 day ago

April 30, 2026

Web Reporter

The Federal Reserve kept its benchmark interest rate unchanged on Wednesday, marking the third consecutive meeting without a move as policymakers weigh rising inflation and growing uncertainty linked to the conflict in the Middle East.

The decision leaves the federal funds rate in a target range of 3.50% to 3.75%. While widely expected, the outcome revealed significant divisions within the central bank’s policy-setting committee, underscoring the difficult balancing act facing officials.

In its post-meeting statement, the Fed said recent developments in the Middle East had added to uncertainty surrounding the US economic outlook. It noted that inflation remains above target, partly due to higher global energy prices following renewed tensions in the region.

Despite holding rates steady, the central bank signalled that cuts remain possible later this year if inflation eases and economic conditions weaken. Still, the decision was far from unanimous. Three policymakers opposed language suggesting future rate cuts, while one official, Stephen Miran, argued for an immediate reduction.

The dissent marked the highest level of disagreement within the Federal Open Market Committee since 1992, highlighting a widening debate over how best to respond to slowing growth and persistent price pressures.

Fed Chair Jerome Powell, who is expected to step down as chair in May, said the central bank must remain cautious as it navigates a complex economic environment. Inflation has risen to 3.3%, well above the Fed’s 2% target, while recent data show the labour market is losing momentum.

Although unemployment remains relatively low at 4.3%, hiring has slowed considerably in recent months. Policymakers are trying to prevent inflation from becoming entrenched while avoiding unnecessary damage to economic growth.

Powell also indicated that he intends to remain on the Fed’s Board of Governors after his term as chair ends, potentially until early 2028. He cited concerns about maintaining institutional stability amid what he described as mounting political pressure on the central bank.

His decision would temporarily prevent President Donald Trump from appointing another governor immediately, even as Trump’s nominee to succeed Powell as chair, Kevin Warsh, moves closer to confirmation.

Warsh has advocated broad changes to the Fed’s policymaking framework and has expressed support for lower interest rates. However, with inflation still elevated, analysts say any shift toward easier monetary policy may be gradual.

The Fed’s next moves will likely depend on how inflation, employment and energy markets evolve in the coming months. For now, policymakers appear determined to proceed carefully as geopolitical risks and domestic economic challenges continue to shape the outlook.

Business

Debate Grows in Germany Over Using Gold Reserves to Ease Economic Pressures

Published

3 days ago

April 28, 2026

Web Reporter

Germany’s vast gold reserves have become the focus of renewed political and economic debate, as calls grow for part of the stockpile to be used to support households, businesses and public investment.

The German Bundesbank holds 3,350 tonnes of gold, making it the world’s second-largest national reserve after the United States. With gold prices recently rising above $4,700 per troy ounce, the value of Germany’s holdings has climbed to nearly €440 billion.

Marcel Fratzscher, president of the German Institute for Economic Research (DIW), has suggested that some of this reserve could be put to practical use. He described the gold stockpile as a valuable resource in times of economic strain and argued that selling a portion could help fund investments in infrastructure and education, while also easing financial pressure on consumers and businesses.

The proposal comes as Germany continues to grapple with rising living costs. Consumer prices remain elevated, with sectors such as transport seeing particularly sharp increases. Official figures show that the Motorists’ Index, which tracks driving-related expenses, was 6.7% higher in March than a year earlier.

Germany’s gold reserves are not all held domestically. About one-third, or 1,236 tonnes, is stored at the Federal Reserve Bank of New York, while another 404 tonnes is held in London. The remainder is kept in Frankfurt. All reserves remain under the ownership and management of the Bundesbank.

The overseas storage arrangement dates back to the post-war Bretton Woods era, when Germany’s trade surpluses were converted into gold. Although the Bundesbank repatriated 374 tonnes from Paris in 2017, most of its foreign-held gold remains in New York.

That has prompted fresh political scrutiny. Some lawmakers and advocacy groups have questioned whether Germany should continue to keep such a large share of its reserves abroad, particularly in the United States.

The Alternative for Germany party has called for the full repatriation of the country’s gold, while also suggesting it could serve as backing for a future national currency. The proposal has been widely rejected by mainstream parties, which have defended both the security of the reserves and Germany’s commitment to the euro.

Others have focused less on location and more on whether some of the gold should be sold. Supporters of that view argue that the reserves could be used more actively during periods of economic difficulty.

The Bundesbank, however, has consistently opposed any sale. It regards gold as a cornerstone of financial stability and a long-term safeguard for confidence in Germany’s monetary system.

While no immediate policy change appears likely, the discussion reflects growing pressure on policymakers to consider every available option as Europe’s largest economy faces mounting economic challenges.

Business

European Fuel Prices Remain Elevated After Iran Conflict Despite Ceasefire

Published

5 days ago

April 26, 2026

Web Reporter

Fuel prices across Europe remain significantly higher than before the US and Israeli strikes on Iran, even after a ceasefire helped ease some of the market pressure.

Petrol and diesel costs surged in the weeks following the military action launched on 28 February, when the United States and Israel carried out strikes against Iranian targets. Iran responded with retaliatory attacks across the region, stoking fears of supply disruptions in global energy markets. Although Washington and Tehran agreed to a ceasefire on 8 April, fuel prices have yet to return to pre-crisis levels.

Data from the European Commission’s Weekly Oil Bulletin show that the average price of petrol across the European Union rose from €1.64 per litre on 23 February to €1.83 by 20 April, an increase of 12%.

Several countries recorded much steeper rises. Belgium, Czechia and Bulgaria each saw petrol prices jump by 22%. Among Europe’s largest economies, France posted the sharpest increase at 18%, followed by Germany at 15%. Italy experienced a 7% rise, while Spain saw a more modest 3% increase. Petrol prices in Malta remained unchanged.

Diesel prices climbed even faster. Across the EU, the average price of diesel rose from €1.59 to €2.01 per litre over the same period, marking a 26% increase. That is more than double the rise recorded for petrol.

Bulgaria experienced the largest diesel increase at 43%. France followed closely with a 36% rise, while Estonia and Belgium recorded increases of 35% and 33%, respectively. Spain’s diesel prices rose by 27%, exceeding the EU average, while Germany and Italy saw increases of 23% and 24%.

Despite the recent pullback, fuel prices remain high in many countries. The Netherlands currently has the highest petrol price in Europe at €2.28 per litre, followed by Denmark at €2.22. Germany, Greece and France all report petrol prices above €2 per litre.

For diesel, the Netherlands also tops the list at €2.30 per litre. Finland, France, Denmark and Belgium are close behind, all above €2.19.

At the other end of the scale, Malta has the lowest fuel prices in Europe. Petrol there costs €1.34 per litre, while diesel stands at just €1.21. Poland and Bulgaria also rank among the least expensive markets.

Fuel prices had already begun climbing before the strikes, but accelerated sharply in March and early April. Diesel briefly exceeded €2.10 per litre before retreating after the ceasefire announcement.

The latest price surge highlights Europe’s continued vulnerability to geopolitical shocks in energy-producing regions. With taxes accounting for a substantial share of pump prices and conventional vehicles still dominating European roads, households and businesses remain exposed to swings in global oil markets.