Announcing the EU/ECB Putsch, The Powers That Be Declare Their Readiness to Introduce a 'Digital Euro'

Pay attention, get ready, and brace for impact. Also: don't be afraid, for fear maketh for a bad advisor when level-headedness is warranted.

A German-language version may be found over at TKP.at

The European Central Bank is on the verge of introducing a ‘digital euro’, as Fabio Panetta of the ECB Executive Board announced yesterday. The ‘highlights’ of his remarks and some bottom lines are below.

For a long time now, the powers that be have been preparing the digitalisation of cash. By far the biggest advantage of doing so is, first and foremost, that a digital currency can be controlled at the push of a button, which is also the decisive difference to ‘conventional’ cash.

Cash and Privacy

Physical money means some privacy protection from total monitoring of any transaction you make.

Conversely, digital ‘money’ means that neither your nor anyone else’s privacy is possible in any transaction. On the contrary, the (central) banks and state authorities have complete access to all the data associated with your transactions within a very short time or ‘in real time’.

Digital Currencies and the Social Credit System

Worse still from the perspective of the sovereign individual, however, is that these digital currency units are ‘programmable’. This means that you cannot spend your ‘digital euros’ as you see fit, as is the case with cash.

In the worst case, you may only spend ‘your’ digital euros on ‘permitted’ things, but not on, for example, air travel if you have exhausted your annual CO2 emissions quota. Account freezes as a result of political dissent are also possible—and as the truck driver protests in Canada last year showed, also a realistic danger.

In short, digital currencies mean the end of freedom.

BIS Chief Agostín Carstens: ‘It's all about total control’

With this in mind, let us now turn to yesterday’s ECB statement.

ECB Panetta on the Digital Euro: ‘widely available and user-friendly’.

The source of the following remarks can be found here. I have omitted the references, slightly shortened the text, and added some emphases.

We are now entering the final stage of the investigation phase of the project. The ECB’s Governing Council recently endorsed a third set of design options for the digital euro—design options that we have also discussed in previous hearings. Today we are thus publishing a report setting out the Eurosystem’s views on how people could access, hold and start to use the digital euro. The report also examines how the digital euro could be distributed by intermediaries as well as the services and features it could offer…

In a modern economy, being able to pay digitally is a basic need for people.

With cash, central banks already provide a means of payment that is risk-free, widely accessible and easy to use, and that leaves no-one behind. But the rapid digitalisation of our economies requires us to complement cash with its evolution in the digital sphere: a digital euro.

So, besides some unsubstantiated statements—’being able to pay digitally is a basic need for people’—the ECB points out that ‘central banks already provide a means of payment that is risk-free, widely accessible and easy to use, and that leaves no-one behind’. The introduction of a digital euro is therefore based on circular reasoning.

It therefore comes as no surprise that Europeans see the ability to pay anywhere as the most important feature of a potential digital euro. In other words, they are keen for one of the key characteristics of euro banknotes to be replicated in the digital realm…

Legislators assigned the legal tender status to euro banknotes in the Treaty, and this is why citizens can use them throughout the entire euro area. [This is ludicrously stupid: legal tender legislation means that people must use this currency to settle accounts; also, not that this doesn’t have to be—counter-examples incl. Switzerland, which allows its citizens to pay their taxes in Swiss Francs, Euros, or Dollars] They are tangible proof that we share a single currency.

The digital euro could also be given legal tender status by legislators. If introduced, the digital euro would be a public good, and Europeans would expect to be able to access and use it easily, anywhere in the Euro area. So, it would be more beneficial and convenient for all users if merchants that accept digital payments were obliged to accept the digital euro as legal tender.

A requirement for merchants to accept digital euro could, in fact, also be seen as an opportunity. For example, it would make European payments more resilient and would enhance competition. This, in turn, would help to make payments cheaper, with clear benefits for everyone in the euro area.

I will spare you parts of this (badly written) ‘administrative prose’, but first and foremost I would like to point out the outrageous discrepancy between the really existing cash (‘legal tender status’) vs. the multiple coercive measures envisaged: merchants—and all others as well—are to be ‘obliged to accept the digital euros’, which could ‘also be seen as an opportunity’. Talk about double-speak.

Individuals and merchants will expect to be able to obtain digital euro at their banks, just like they do today with cash. It should be simple for people to start using the digital euro, and there should be no need to change bank in order to do so.

In our regular exchanges, consumer associations and merchants have remarked that the best way to ensure broad access for consumers would be to require euro area banks and other payment service providers to make the digital euro available to their customers. Previous attempts at building pan-European payment initiatives have shown that ensuring broad access throughout the euro area has ultimately always required regulatory measures…

People should be able to pay and be paid in digital euro anywhere in the euro area, no matter which intermediary they are using to access the digital euro or which country they are in…

Even if supervised intermediaries will distribute the digital euro, one should not forget that it will be a liability of the central bank. The Eurosystem, as its issuer, would be accountable to euro area citizens for its correspondence to their payment needs. The Eurosystem should therefore be able to govern the standards to ensure that using a digital euro in the future is as standardised as using cash today. It would do so by steering consensus among all involved stakeholders – consumers, retailers, banks and non-banks. [note the absence of any notion of ‘citizens’ here]

The Four Pillars of the Digital Euro

The first principle is that, as a public good, the digital euro should serve society. We believe consumers should be able to use it free of charge for basic day-to-day purposes.

Second, intermediaries [read: banks and financial institutions] should be compensated for the services they provide, just like they are for other digital payments.

Third, legislative safeguards should prevent merchants from being overcharged by intermediaries if they are obliged to accept digital euro as legal tender. While we believe that the digital euro would allow for more competitive fees, this principle would ensure that fees for merchants cannot exceed the current levels for comparable means of payment. [again, no mention of surcharges being dumped on ‘consumers’]

Finally, the Eurosystem would bear its own costs, for example for settlement activities and managing the common standards for making and receiving payments in digital euro. This would reflect the public good nature of the digital euro and follow the same logic that currently applies to cash. The savings that arise from the Eurosystem covering its own costs would ultimately benefit the end-users.

The Path Ahead, According to the ECB

It will then be European legislators to decide whether the digital euro will be an inclusive, truly European means of payment—widely usable and accessible across the entire euro area, free for basic use, and offering the highest levels of privacy. The success of a digital euro will be in your hands.

As has been noted, the introduction of a digital euro has been decided; it is only a question of implementation or how ‘friendly’ this next data kraken will be. One looks in vain for references to data protection, privacy or the like. The responsibility of the ECB is cited, with the national parliaments of the Eurozone apparently being assigned the role of a ‘lightning rod’.

The ECB stands ready to continue discussing all these issues with you during the legislative process. Throughout the next project phase, which is expected to be launched later this year, we will accommodate any necessary adjustments to the design of the digital euro that may emerge from legislative deliberations. In that phase, we will develop and test the possible technical solutions and business arrangements necessary to provide a digital euro.

How generous: the ECB, as part of the regulatory apparatus, ‘stands ready to continue discussing all these’ with the legislators—who, after all, are, technically speaking, the representatives of the sovereign people in our allegedly democratic systems. This is little more than the inversion of sovereignty brought about by the EU: it is no longer ‘the people’ who are sovereign, but the executive, regulatory, and supervisory bodies.

These two processes—legislative and design—should advance in parallel so we can be in a position to promptly begin issuing a digital euro, if and when warranted. The possible decision by the Governing Council to issue a digital euro would be taken only after the legislative act has been adopted.

So now everything is to be prepared in parallel—i.e., without a corresponding mandate by ‘the legislator’ in place before the executive authorities jump into action—in order to be ready for action in case of an emergency. This is, once again, not how the legislative process should proceed: first the creation of legal foundations, followed by their implementation. To claim that the ECB is behaving in the spirit of democratic constitutional orders and norms is, to put it mildly, window dressing.

We will take all the necessary measures to ensure that the digital euro would act as a true public good. But all European institutions have to play their part to achieve our common goal of making the digital euro a success. This is why we are looking forward to the European Commission’s legislative proposal. It will be a decisive step forward for the digital euro and put Europe at the forefront of the work on central bank digital currencies among the G7.

‘The legislator’ is the respective parliaments of the member states, not the EU Commission.

The EU/ECB coup

What is being said through so many words is, in all candour, this: the end of the remnants of the European national-state, popular sovereignty, and individual freedoms.

The powers that be in Brussels and Frankfurt am Main (the seat of the ECB) admit, in no uncertain terms, that they are working on a Europe-wide putsch against the European peoples, their constitutions, and our legal systems.

‘They’ have let the mask slide.

What, then, can be done?

Pay with cash as often as possible.

Refuse ‘digital solutions’ whenever possible.

Switch your ‘smartphone’ in ‘flight mode’ as often as possible and use it as little as possible.

Prepare yourself as well as possible for the upcoming ‘shock therapy’ of the introduction of the digital euro.