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‘The digital euro can lead to very wrong decisions’

It was busy, loud and crowded in the House of Representatives this Wednesday afternoon. Not because of a debate in the large plenary meeting room, but because of a committee meeting in one of the smaller rooms of the House of Representatives. The subject of the meeting has quickly become a much-discussed theme on the internet and in activist circles: the digital euro.

Now the monetary system is still simple. You can keep money in your pocket or put it in an account at the bank. Cash is public money: the coins and notes are issued by the central bank. Money in an account is private money: you entrust it to a commercial bank.

Now that cash is making way for debit card payments in more and more places, that balance has been lost. More and more euros are deposited with commercial banks. That is why the European Central Bank wants a digital euro. It only exists electronically, but like coins and banknotes it is issued and guaranteed by the European Central Bank.

Such a currency is not only being considered in Brussels and Frankfurt, where the ECB’s head office is located. The US, China and Sweden have their own plans for a digital version of their currency. And then there are tech companies that want to launch an electronic currency. This also plays a role in the preparations that the ECB is making: the central bank does not want the euro to lose out to other international e-currencies.

Conspiracy theories

Next year, the European Commission wants to come up with concrete plans. Now that the digital currency is getting closer, criticism is mounting. On Wednesday, they ranged from complaints about the involvement of Amazon, which is developing one of the prototypes, to conspiracy theories about European policymakers who would like to gain insight into the payment behavior of their citizens or even certain payment behavior – a flight that CO2 emissions – would like to block.

The latter concerns also dominated the public, who had drawn to the House of Representatives with whistles and inverted flags. “You cannot separate this enormous rise from the declining confidence in the institutions,” says SP Member of Parliament Mahir Alkaya. “A government may then say: we are only going to use it for good. But not everyone believes that so easily anymore.”

Alkaya is, together with VVD Member of Parliament Eelco Heinen, rapporteur on this subject. A few years ago he was in favor of a digital currency, now he is one of the opponents.

MP Mahir Alkaya during the committee meeting.
Photo Bart Maat/ANP

What has changed?

“I saw a lot in a public bank as an alternative to commercial banks. After the banking crisis, the risks in the banking sector have remained, but at the same time the government says that they cannot go bankrupt. Then the government guarantees a large part of the savers. So the bank has the benefits – the profit – but not the burdens.

“I think that’s the wrong way. I think you should treat commercial banks as commercial. They can make a profit, but they must also be able to go bankrupt. That is only possible if you put a public bank next to it.”

Isn’t that what the ECB is creating with this digital euro?

“No, it is not going that way at all. This digital euro will not be a good alternative to commercial banks at all. Their position must not be shaken. You will soon not be able to use the ECB’s digital currency without an intermediary. It is obvious that these will again be the same commercial banks.”

You called the debate ‘mustard after dinner’. But the decision to implement has not yet been taken, has it?

“It is heading that way. There are still possibilities to influence the process. The Netherlands will then have to join forces with other countries, as is already the case, with one clear standpoint. I see the government as an ally that takes the concerns of the House of Representatives seriously. Only: when push comes to shove, it is set up in Brussels in such a way that a single member state cannot block this.”

You also fear that the digital currency could be used for political purposes. But nowhere in the ECB plans does it say that cash should disappear or that climate plans will be implemented via the digital euro.

“I think it could be a solution. An example: Brussels is working on climate plans to reduce emissions. This is now often done via companies, but what if you want to do this via consumers? Or if a judge says: the government will not meet the climate plans and must now reduce the CO2emissions, just as happened with nitrogen. Then this option is there.

“The intention is good. They want to combat climate change or stop terrorism financing. I get that. But you can make very wrong decisions with the best of intentions. I also thought before the pandemic: there will be no QR codes, there will be no curfew.”

They want to combat climate change or stop terrorism financing. But you can make very wrong decisions with the best of intentions

To what extent does your point of view differ from parties such as the PVV, FVD and JA21?

“The far right is already stating: it’s all mapped out like that, that’s the intention. I don’t think so, but I do think it could turn out that way. I see an elite with its own material interests, with this as a possible outcome.

“They give it a whole twist and say: it’s not their interests, it’s just evil people, reptiles, pedophiles, satanists. I feel a responsibility not to feed that narrative, but I would consider it a dereliction of duty if I let it inhibit me from expressing criticism.”

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