EU superstate fears: Bloc told euro can only survive if eurozone becomes ‘single state’

Digital euro project goals discussed by Valdis Dombrovskis

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Governor of the Bank of Italy Ignazio Visco, who sits on the European Central Bank’s (ECB) governing council and general council, said: “The euro can only last if the eurozone becomes a single state”. His comments come after it was announced that the European Commission and the ECB are to launch a digital euro project, with bankers on the continent keen to see the rollout in place in the coming months.

Mr Visco, who was appointed head of Italy’s bank in 2011, said the ECB is “the only federal central bank in a group of countries that do not have a federal structure.”

Insisting a single state was inevitable, he said the coronavirus pandemic which has ravaged EU member states for almost a year “is in part pushing in that direction”.

Speaking to reporters about the review of the ECB’s monetary policy strategy, Mr Visco laid out his vision for Europe’s future.

He said: “A stateless currency can last up to a certain moment, but then there is a need for a state and a budgetary union.”

Mr Visco’s banking career spans five decades and he takes part in the G7, G10 and G20 meetings and is on the board of directors of the Bank for International Settlements (BIS).

His comments echo the view expressed last week by Italy’s new prime minister, Mario Draghi.

Delivering his premier keynote speech, Mr Draghi, a former president of the ECB, called for a common public budget across the 27-member bloc.

He told the Italian senate that supporting his government “means sharing the irreversibility of the choice of the euro, and it means sharing the perspective of an increasingly integrated European Union that will lead to a common public budget.”

The European Commission has taken heavy criticism for its handling of the Covid vaccine chaos.

The UK is surging ahead of the pack on the vaccine front as Brussels grapples with supply problems and slow rollouts.

Mr Visco said the Bank of Italy is “a fundamental component of shared sovereignty, as Mario Draghi said a few days ago.”

He added: “History teaches us that a currency without a state can last for a certain period, but then we must move towards greater unity.”

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He predicted the bloc was on track to face huge challenges over the coming years.

Looking to the future, he said the Bank of Italy would need to exercise greater transparency “and more attention to citizens”.

He said the institution would offer a better explanation of central bank dynamics through the use of social media and technology.

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Bankers aim to communicate directly with citizens by jumping on platforms such as Twitter, Facebook, Instagram and even TikTok.

Mr Visco said of the plan: “We need to explain why certain decisions are made or why such tools are used.”

His comments came after it emerged bankers across the Channel are preparing for the introduction of a digital euro.

It will serve as a supplement to, not a substitute for, physical notes and coins.

In a joint statement, the European Commission and the ECB said they hope the project will be up and running by the middle of 2021.

They said: “Such a project would answer key design and technical questions and provide the ECB with the necessary tools to stand ready to issue a digital euro if such a decision is taken.”

Additional reporting by Maria Ortega.

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