Last October, the European Central Bank (ECB) announced that it was concluding the research phase of the Digital Europroject and moving on to its implementation. However, the questions of what impact the introduction of central bank digital currency (CBDC) will have on the financial market and whether it will benefit consumers still need to be answered.
The current social package worth more than a billion euro has definitively confirmed that Slovak government is going kamikaze in the area of public finances. After all, the money is “lying on the pavement”.
The US Federal Reserve System (Fed) has announced that it will raise interest rates. They have been at zero since the start of the pandemic and since the last recession in 2009, they hit their highest level in 2019. But even in 2019, they were very low, with an effective rate of about 2.5%.
Polystyrene, wood, reinforcement steel, and other materials have not only become expensive, but their lack in warehouses indicates that the increase of prices will continue. It is similar with notebooks, bicycles, or maize.
Estonia could become the first country in the world with virtual currency, the Estcoin. The problem is that the country’s official currency is Euro and membership in the Eurozone does not allow having any other parallel cryptocurrency.
We can find examples of negative interest rates in countries throughout history. But these are geographically or time-isolated cases. However, today we live in a world where more and more things are turning upside down. And one of such things is the fact that negative interest rates are shifting from a deviation to a norm (for the time being only within the financial system).
The chairman of the Central Bank of Lithuania will become a member the Governing Council of the European Central Bank, which is responsible for monetary policy for the euro area. Thus, if Lithuania wants to properly represent it‘s interests, it has to join the debate concerning decisions of the ECB.
While the European Central Bank, governments and many economists complain about the danger of deflation a currently published microeconomic analysis from the famous Kiel Institute for the World Economy tells a different story.
Except for few unfortunate ones, high schoolers have already finished their key exams. European banks have not.
Contrary to what Lithuania’s prime minister claims, discussions on euro introduction are far from over. They might be over for those who have had the task of convincing Lithuanians about the benefits of having the euro.
