Europe’s heavy reliance on American payment providers leaves it vulnerable to economic coercion, European Central Bank (ECB) chief economist Philip Lane warned on Thursday, highlighting a key risk amid worsening U.S.-EU relations.
Speaking in Cork, Lane underscored that Visa and Mastercard process about two-thirds of card payments in the eurozone, while tech giants like Apple Pay, Google Pay, and PayPal handle a significant share of digital transactions. This dependence, he argued, threatens Europe’s financial sovereignty.
“Europe’s reliance on foreign payment providers has reached striking levels,” Lane stated. “This dependence exposes Europe to risks of economic pressure and coercion, limiting our ability to control critical aspects of our financial infrastructure.”
As global financial systems become tools of geopolitical influence, Lane stressed the need for Europe to regain strategic autonomy in payments. He pointed out that in 13 of the eurozone’s 20 countries, national card networks have been entirely replaced by international alternatives, exacerbating the risk.
To counter these vulnerabilities, Lane advocated for the introduction of a digital euro—a state-backed digital currency that would allow direct retail transactions without intermediaries like Visa or Mastercard.
“The digital euro is a promising solution to counter these risks and ensure the euro area retains control over its financial future,” he said.
Designed to function like cash, a digital euro would enable payments via a digital wallet—likely a phone app—allowing users to transact directly without relying on private payment processors. The funds would be a direct claim on the ECB, similar to banknotes.
Despite years of groundwork, the ECB still requires EU-wide legislation to proceed with the digital euro, a process that has faced delays, frustrating some policymakers. The central bank has set a deadline for the end of 2025 to decide whether to move forward with the next phase of development.
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