Today, the European Commission and national consumer protection authorities of 25 Member States as well as Iceland and Norway released the results of a screening (‘sweep’) of online traders selling second-hand goods, such as clothes, electronic equipment or toys.
‘Sweeps’ are coordinated by the European Commission and carried out simultaneously by national enforcement authorities. The objective of this sweep was to verify whether the practices of these traders are compliant with EU consumer law. Consumer authorities checked 356 online traders and identified 185 (52%) as potentially in breach of EU consumer law.
Out of the total amount of traders screened:

40% did not inform consumers of their right of withdrawal in a clear manner, such as the right to return the product within 14 days without justification or cost;
45% did not correctly inform consumers of their right to return faulty goods or goods that do not look or work as advertised;
57% did not respect the minimum period of one year legal guarantee for second-hand goods;
Out of 34% of traders that presented environmental claims on their website 20% were not sufficiently substantiated and 28% were manifestly false, deceptive, or likely to qualify as unfair commercial practices;
5% did not provide their identity correctly, and 8% did not provide the total price of the product, including taxes.

Consumer authorities will now decide whether to take action against the 185 traders that were earmarked for further investigation and request compliance according to their national procedures.
Background
The Consumer Protection Cooperation (CPC) is a network of national authorities responsible for the enforcement of EU consumer protection laws. Under the coordination of the European Commission, they collaborate to tackle infringements of consumer law occurring in the Single Market.
Traders’ obligations with regards to consumer information are covered by the Consumer Rights Directive and the e-Commerce Directive. Traders’ commercial practices must not mislead consumers and comply with the Unfair Commercial Practices Directive. When selling second-hand goods, traders should also respect their obligations regarding the legal guarantee of conformity stated in the Sales of Goods Directive.
The new Directive on Empowering Consumers for the Green Transition, once transposed by Member States into their national law, will ensure that consumers are provided with better information on the durability and reparability of goods and the consumer’s legal guarantee rights at the point of sale. It will also strengthen consumer protection rules against greenwashing and early obsolescence practices.
The main sectors of activity concerned are clothes, accessories, electronic equipment, toys and gaming items, books, household appliances, interior design and furniture, CDs and vinyls, childcare products, cars (including electric cars), sport items, spare parts, motorbikes and bikes, gardening items, do-it-yourself and others.
The following EU Member States participated in the sweep: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. Iceland and Norway also took part to the sweep.
 
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Blog post by Clémence Berson, Vasco Botelho, Luis Guirola Abenza, Laura Hospido, Friderike Kuik, Christiane Nickel and Manuel Rojo Lopez | The gender gap in labour markets is narrowing. But this process has slowed down. The ECB Blog gives an overview of recent developments for all euro area countries.

The gender gap at work is closing – but slowly. Women are paid less for their work than men are.[1] Inequality on the labour market keeps us from making the best use of all talent, leads to inefficiency and misallocation of workers. However, the gender gap is shrinking, albeit at a decreasing speed. We show the differences between women and men on the labour markets in hours worked, part-time positions, wages and total earnings for all euro area countries.[2] Our interactive graphs let you compare the developments in gender inequality among countries and over time.
Gender gaps in the euro area labour market
Based on an analysis using household-level data from the EU Survey on Income and Living Conditions (EU-SILC) we find that the gender gap in total earnings has improved significantly. In 2005 it stood at 50%, meaning that the average man took home double the yearly pay of the average woman (aged 15 to 64). By 2023 this had fallen to 35% (Chart 1).[3] While this change is significant, the gap in the euro area remains quite large. In addition, the speed at which it is narrowing is slower than two decades ago.

Chart 1
Gender gap in total earnings

Percentage of the mean earnings for the average male aged 15-64; and percentage point contributions

Sources: Eurostat, EU SILC, and ECB staff calculations. Notes: The decomposition of the gender gap in total earnings follows the methodology in Olivetti, Pan, and Petrongolo (2024), and Andrew, Bandiera, Costa Dias and Landais (2024), which decomposes the effects in three different gaps – (1) the hourly wage gap, (2) the gap in the number of hours worked, and (3) the employment participation gap.

Three main elements of the gender wage gap
A major factor behind the gender gap is the different labour participation rates of men and women. In 1992 the employment rate of women (44.8%) was 27.8 percentage points lower than that of men (72.7%) across today’s euro area countries (Chart 2).[4] This was because women often struggled to find stable jobs and – to a greater extent than men – took care of their households. Since then female employment has increased gradually, reducing the gap to 9.0 percentage points by 2023. The red bar in Chart 1 shows how the shrinking employment gap – from 17.3 in 2005 to 10.5 percentage points in 2023 – contributed to a similar decrease in the gender earnings gap.
A second factor is the different patterns for part-time work. Women remain significantly more likely to work part-time than men. While in the 1990s the rate of women in part-time contracts was 21.5 percentage points higher than that for men, by the mid-2000s this figure had grown to 26.9 percentage points before shrinking slightly to 24 percentage points by 2024 (Chart 3). This discrepancy contributes to the gender gap in total earnings because it affects the hours usually worked by men and women. It accounted for 14.1 percentage points of the earnings gap in 2005, falling to 10.7 percentage points by 2024. This decrease could be associated with an increase in the average hours worked by women in part-time employment, mitigating the effects from a large gap in part-time employment. In other words, women work part-time more often, but female part-timers have increased their hours over time.
A third factor is the hourly pay gap. This figure measures how much more the average man earns per hour than the average woman. In 2023 it stood at 13.4%, down from 17.8% in 2005, with an average annual decrease of only 0.2 percentage points.
What is behind this sluggish change? While education might appear to be a likely factor, women now in fact have a slightly higher average level of education than men, meaning that the cause must lie elsewhere. One explanation is the existence of clusters. Some occupations are more male-orientated, like firefighting or engineering, while others are more female-orientated, like nursing or teaching. And some of the male-orientated jobs simply pay better. Other explanations relate to norms and beliefs about gender roles, men and women’s different preferences, or women’s more limited possibilities to change jobs due to external constraints.[5] And of course there is also the possibility of simple discrimination. Because even when we control for additional factors such as average years of employment or maternity leave periods, there is still an unexplained wage gap. In Germany, for example, this unexplained gap stood at 6% in 2024. This is the average difference in pay between female employees and male employees with comparable job qualifications and career paths.
Regional patterns: gender gaps in different countries
While we find that the gender gap is narrowing across the euro area, there are significant regional differences. These depend on labour market features, national policies and culture, as shown in interactive Charts 2 and 3.[6] In northern countries, especially Finland for example, the gender pay gap is quite small. Use the “select” option in the toolbar to explore the situation in other countries. The gap in working time, however, is still significant. In Eastern Europe, for example the Baltic countries, you will find a more equal working environment in terms of both employment rates and hours worked. This has been attributed to the legacy of socialism,[7] which promoted women’s economic inclusion. In Western Europe men’s and women’s employment rates have converged, with many women entering the workforce, often in part-time jobs, and in particular in Austria, Germany and the Netherlands. Meanwhile in Southern Europe the gender gap in employment has also narrowed significantly, driven by a higher share of women being in full-time rather than part-time employment. Portugal, which has historically had small gender gaps in employment, is a particular success case in this region.
If governments aim to close the gender gap in labour markets, public policies should be targeted towards barriers faced by girls and women, for example with paid parental leave policies and investments into the childcare system. Academic studies have highlighted the importance of childcare, especially during the first few years, on women’s labour market participation.[8] Increasing the time fathers can spend with their young children would also help reduce the “child penalty” women face in the labour market and their unequal burden at home.
Closing the gap
But these public policies cannot fully tackle every cause of gender gaps in the workplace, which are usually linked to discrimination and unconscious bias against women. Steering young women and girls towards more scientific careers, for example, could help to reduce existing gender gaps by opening up alternatives that women traditionally do not consider. Institutional initiatives such as mentorship programs, networking opportunities, and training and development programs can also help to empower women and provide them with the tools they need to succeed. By addressing the barriers to women’s participation and promoting gender equality, we can create a more inclusive and diverse workforce that benefits everyone. However, closing the gap is not solely an issue for women. New fathers should also have the opportunity to take care of their newborns, possibly via more generous paternity leave policies, and access to childcare should be improved. All these actions taken together would help addressing what the Nobel Prize laureate Claudia Goldin referred to as the “last chapter” in achieving gender equality.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
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For a literature review, see Blau, F. D., and Kahn, L. M., “The gender wage gap: Extent, trends, and explanations”, Journal of Economic Literature, vol. 55, No. 3, 2017.
Composition effects in determining employment and wage growth in the euro area, accounting also for gender, were notably reported by Kouvavas, O., Kuik, F., Koester, G., and Nickel, C., “The effects of changes in the composition of employment on euro area wage growth”, ECB Economic Bulletin, Issue 8/2019, 2020.
The gender gap in total earnings reflects the difference between the total earnings from employment recorded by the average man and by the average woman in the working age population (15-64 years old), expressed as a ratio to the total earnings from employment obtained by the average man in the same age group.
See Berson, C., and Botelho, V., “Record labour participation: workforce gets older, better educated and more female”, The ECB Blog, 2023.
For further insights, see Olivetti, C., Pan, J., and Petrongolo, B., “The evolution of gender in the labor market”, NBER Working Papers, No 33153, 2024.
See Guirola, L., Hospido, L., and Weber, A., “Family and career: an analysis across Europe and North America,” Banco de Espana Working Papers, No 2415, 2024.
See for example Senik, Lippman and Georgieff, “Undoing gender with institutions: Lessons from the German division and reunification”, Economic Journal, 130 (629), 1445-1470, 2020.
See Morrissey, T. W., “Child care and parent labor force participation: a review of the research literature”. Review of Economics of the Households, 2017, vol. 15, Issue 1, No1, OECD, “Engaging young children,” 2018.

Full post, featuring interactive graphs, here.
 
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We are living in the most momentous and dangerous of times. I do not need to describe the grave nature of the threats that we face. Or the devastating consequences that we will have to endure if those threats would come to pass. Because the question is no longer whether Europe’s security is threatened in a very real way. Or whether Europe should shoulder more of the responsibility for its own security. In truth, we have long known the answers to those questions. The real question in front of us is whether Europe is prepared to act as decisively as the situation dictates. And whether Europe is ready and able to act with the speed and the ambition that is needed. In the various meetings in the last few weeks – most recently two days ago in London – the answer from European capitals has been as resounding as it is clear. We are in an era of rearmament. And Europe is ready to massively boost its defence spending. Both, to respond to the short-term urgency to act and to support Ukraine but also to address the long-term need to take on much more responsibility for our own European security.
This is why today I have written a letter to Leaders ahead of Thursday’s European Council. This is why we are here together today. And I have outlined in this letter to the leaders the ReArm Europe Plan. This set of proposals focuses on how to use all of the financial levers at our disposal – in order to help Member States to quickly and significantly increase expenditures in defence capabilities. Urgently now but also over a longer time over this decade. There are five parts to this.
The first part of this ReArm Europe plan is to unleash the use of public funding in defence at national level. Member States are ready to invest more in their own security if they have the fiscal space. And we must enable them to do so. This is why we will shortly propose to activate the national escape clause of the Stability and Growth Pact. It will allow Member States to increase significantly their defence expenditures without triggering the Excessive Deficit Procedure. For example: If Member States would increase their defence spending by 1,5% of GDP on average this could create fiscal space of close to EUR 650 billion over a period of four years.
The second proposal will be a new instrument. It will provide EUR 150 billion of loans to Member States for defence investment. This is basically about spending better – and spending together. We are talking about pan-European capability domains. For example: air and missile defence, artillery systems, missiles and ammunition drones and anti-drone systems; but also to address other needs from cyber to military mobility for example. It will help Member States to pool demand and to buy together. Of course, with this equipment, Member States can massively step up their support to Ukraine. So, immediate military equipment for Ukraine. This approach of joint procurement will also reduce costs, reduce fragmentation increase interoperability and strengthen our defence industrial base. And it can be to the benefit of Ukraine, as I have just described. So this is Europe’s moment, and we must live up to it.
Third point is using the power of the EU budget. There is a lot that we can do in this domain in the short term to direct more funds towards defence-related investments. This is why I can announce that we will propose additional possibilities and incentives for Member States that they will decide, if they want to use cohesion policy programmes, to increase defence spending.
The last two areas of action aim at mobilising private capital by accelerating the Savings and Investment Union and through the European Investment Bank.
To conclude: Europe is ready to assume its responsibilities. ReArm Europe could mobilise close to EUR 800 billion for a safe and resilient Europe. We will continue working closely with our partners in NATO. This is a moment for Europe. And we are ready to step up.
 
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The Union of Skills will support the development of our Union’s human capital to strengthen EU competitiveness. A key initiative of the first 100 days of this Commission, the Union of Skills will:  

Deliver higher levels of basic skills, for example through the Basic Skills Support Scheme pilot;

Provide lifelong opportunities for adults to regularly upskill and reskill, for example through a Skills Guarantee pilot;

Facilitate recruitment by businesses across the EU, for example through a Skills Portability Initiative;

Attract and retain the skills and talents needed in the European economy, for example through the ‘Choose Europe’ action to attract top talent globally;

Have a strong governance foundation, building on the new European Skills High-Level Board that will be informed by a European Skills Intelligence Observatory.

From children at school to those reaching retirement, this initiative will empower people across Europe with the skills they need to thrive. It will also encourage the portability of skills across the continent through the free movement of knowledge and innovation.
The Union of Skills Communication is accompanied by an Action Plan on Basic Skills and a STEM Education Strategic Plan to improve skills in science, technology, engineering, and maths, promote STEM careers, attract more girls and women, and boost preparedness in the face of digital and clean-tech transitions.
New targets for 2030
The Commission proposes a number of new targets by 2030:

The share of underachievement in literacy, mathematics, science and digital skills should be less than 15%, whereas the share of top performance in literacy, mathematics and science should be at least 15%;
The share of students enrolled in STEM fields in initial medium-level VET should be at least 45%, with at least 1 out of every 4 students female;
The share of students enrolled in STEM fields in third-level education be at least 32%, with at least 2 out of 5 students female;
The share of students enrolled in ICT PhD programmes should be at least 5%, with at least 1 out of every 3 students female.

Building a solid foundation through education and training
Education and training play an essential role in creating quality jobs and lives, for example we will support literacy, maths, science, digital and citizenship skills through the Basic Skills Support Scheme pilot. Together with Member States, the Commission will develop and financially support a framework of effective intervention measures (such as early warning, monitoring, personalised support, networks). This scheme for children and young people that struggle to acquire basic skills will improve their achievement levels.
Regular upskilling and reskilling as the new norm
Developing new skills should be a recurring and essential part of peoples’ professional lives in our evolving economies.
The Commission will develop a Skills Guarantee pilot. This scheme will offer workers involved in restructuring processes, or at risk of unemployment, the opportunity to develop further their careers in another company or another sector.
The EU will streamline and reinforce the EU Skills Academies that deliver the skills needed by businesses for the green transition and the Clean Industrial Deal.
Helping the free movement of skilled people
The Single Market’s full potential will be unlocked by circulating skills. To open up more opportunities for workers and businesses, a Skills Portability Initiative will make it easier to recognise and accept skills and qualifications across the EU, independently of where they were acquired. The initiative will promote the use of digital credentials.
Making the EU a magnet for talent
The Union of Skills will bolster the EU’s ability to attract, develop and retain key talents, from inside the EU and around the world.
For example, the Commission will launch a Marie Skłodowska-Curie Actions pilot call ‘Choose Europe’ with a budget of €22.5 million to attract top talent globally, by offering excellent scientific working and employment conditions and careers prospects.
Furthermore, once adopted by the Parliament and Council, the Commission will set up an EU Talent Pool for recruitment from outside the EU at all skills levels, especially in occupations facing severe shortages. A Visa Strategy will be presented this year to further support the arrival of top students, trained workers, and researchers.
Strong new governance
Delivering on the Union of Skills will require a collective responsibility and increased ambition, investment, and effective reform implementation. For this, the Union of Skills will rest on a strong governance, informed by a European Skills Intelligence Observatory. The observatory will provide data and foresight regarding skills and allow for early warning alerts regarding skills shortages in critical or strategic sectors.
A new European Skills High-Level Board, will bring together education and training providers, business leaders and social partners to provide comprehensive insights on skills to the EU policy makers. Building on the Observatory the Board will ensure a coordinated vision and the identification of the bold action necessary to strengthen our human capital.
Because human capital, education and skills are a core matter for ensuring European competitiveness, the Commission intends to introduce a new EU-27 Recommendation on education and skills in the European Semester cycle, to guide the Member States and relevant actors.
 
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Today, the Strategic Technologies for Europe Platform (STEP) celebrates its first year in action for the development and manufacturing of critical technologies in Europe. Over the past year, STEP has pooled the investment firepower of 11 EU programmes, mobilising over €15 billion to support Europe’s competitiveness in three strategic sectors: digital technologies and deep-tech innovation, clean and resource-efficient technologies, and biotechnologies.
So far, €9.1 billion of EU funds have been mobilised towards STEP across five programmes managed by the Commission directly, namely the Digital Europe programme, the European Defence Fund, the EU4Health programme, Horizon Europe, and the Innovation Fund. Additional €6.1 billion of EU funds are being mobilised towards STEP thanks to reprogramming of cohesion policy funds by 11 pioneer EU Member States.
The Commission’s STEP Taskforce works, hand in hand, with the 27 EU Member States. The STEP Taskforce regularly engages with project promoters, managing authorities and relevant associations to improve the set-up and understand their investment needs. Extensive outreach and a dedicated survey answered by some 500 research and industry organisations confirmed the strong demand for simplification of access to EU funding.
Building on the success of STEP, President von der Leyen suggested, in her letter to EU Leaders ahead of the special European Council on 6 March, that STEP could be further leveraged by enlarging its scope to all technologies relevant for the defence sector.
Improved and streamlined access to funding opportunities
The STEP Portal provides a one-stop, user-centric platform for project promoters to access all STEP funding opportunities across EU programmes and Member States. About 60 calls for proposals at EU and national levels have been published so far and about 40 of them remain open for submission.
Promoting high-potential EU projects for better access to funding
The STEP Portal currently showcases the first 142 high potential projects that have been awarded the STEP Seal by the Commission. The project promoters are informed about funding opportunities as well as advisory services while their projects are made visible to private and public investors, including implementing partners like the European Investment Bank (EIB) Group or National Promotional Banks.
Some prominent examples of STEP Seals awarded by the Commission in 23 Member States by the Commission include:

Digital tech: OpenEuroLLM will bring together EU startups, research labs and supercomputing hosting entities from all over the EU to train the first-ever family of open-source Large Language Models for artificial intelligence covering all official and future EU languages.

Clean tech: Energy Observer 2 in France and the Netherlands will be the world’s first hydrogen-powered cargo ship, featuring advanced cryogenic tanks for the storage of hydrogen and fuel cell technology to cut maritime freight emissions by 98%.

Bio tech: PHARMSD 3.0 of Portugal aims at setting a new standard for continuous pharmaceutical manufacturing with the optimisation of spray drying, a method that turns liquid drug formulations into stable powders.

STEP seeks to leverage and de-risk private investment for EU high-potential projects. The STEP Taskforce is reaching out to private investors to promote STEP Seals projects, increasing their visibility and identifying investments paths.
Next steps in 2025
STEP’s positive momentum is expected to strengthen in 2025 with the support of Member States for the success of innovative projects and the reduction of dependencies in strategic technologies. Member States are encouraged to leverage STEP opportunities under NextGenerationEU/ Recovery and Resilience Fund. They can reallocate resources to STEP-labeled projects and transfer up to 6% of their RRF envelope to their national compartment in InvestEU to fund these projects.
Background
STEP was established by the EU Regulation in March 2024, as part of the mid-term review of the MFF. 
As part of the work on the interim evaluation of STEP, the Commission will gather evidence and feedback through a call for evidence that will be launched on Have your Say in the coming days and will stay open for contributions for four weeks.
STEP will be promoted at several events in the coming months. To stay updated, you can subscribe to the STEP Newsletter and check the press and media section of the STEP Portal.
 
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Smart policies that help people realize their potential can be game-changing for entire societies
Every great leap in human progress—from the printing press to the steam engine to the semiconductor—has been driven by ideas. But ideas do not emerge in a vacuum; they come from people. And among them, it is often the most talented minds that push the boundaries of what is possible.
This makes talent one of the world’s most valuable resources that can drive innovation and growth. Countries that develop the best minds gain a competitive edge. Those that fail to do so don’t just slow their own progress—the world loses, too. Every untapped genius is a discovery that never happens, a technology that never emerges, a field that never takes off. The next transformative idea—a cure for a disease, a revolutionary technology—could come from anywhere. But only if the right minds are given an opportunity to reach their full potential. The newest issue of Finance & Development explores the economics of talent.
Societies have a strong interest in expanding opportunities for people to become scientists, inventors, and entrepreneurs. Ruchir Agarwal and Patrick Gaule examine what they call the missing equation: how best to identify, nurture, and empower young geniuses, particularly in science, technology, engineering, and math. Overlooking even one talented individual can mean sacrificing insights that could transform entire fields. Too often, developing economies fail to spot their top talent early, allowing potential to go untapped.
Consider Tabata Amaral, a child prodigy from Brazil whose rise—from a modest background to become a leading voice in policy—was made possible by public school math Olympiads. “If I’m here,” she says, “it’s because of those competitions.” Her case is all too rare. Across the world, latent talent often remains undiscovered—not for lack of ability but for lack of opportunity.
The data illustrate this reality. Research by Xavier Jaravel of the London School of Economics and his colleagues shows that access to education, family income, and social networks shape who becomes an inventor. Many children have the ability but lack the circumstances to realize their potential. The economic cost of this untapped talent is staggering. If gifted youth worldwide had equal access to the resources needed to develop their potential, global scientific output could rise dramatically, benefiting everyone.
Artificial intelligence adds a new dimension to this challenge. As IMF economist Marina Tavares notes, AI could either amplify human potential or shrink the space for innovation. If used wisely, it could empower talent at an unprecedented scale. If mismanaged, it could concentrate power in fewer hands and limit creative breakthroughs.
Meanwhile, Harvard University’s William Kerr argues that countries adept at attracting and retaining top performers will be better positioned to counter demographic pressures such as aging populations and slowing productivity growth. The global race for talent is not just about finding the brightest minds—it is about securing the economic future.
Identifying standout individuals—especially in disadvantaged communities—is crucial. But so is expanding access to education. Strengthening secondary and postsecondary education, equipping youth with vocational skills, and fostering environments that nurture creativity and problem-solving can also help reduce inequality of opportunity.
The economics of talent is an emerging field, but one thing is clear: Smart policies that help people realize their potential can change the game for entire societies. We hope the articles in this issue will spark new thinking among policymakers and leaders. By shining a light on talent, we aim to inspire real progress where it matters most: expanding human ingenuity to solve the defining challenges of our time.
To read the full issue, click here (PDF).
 
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Contribution to Bancaria by Piero Cipollone, Member of the Executive Board of the ECB, based on remarks at the Crypto Asset Lab Conference on 17 January 2025

Being a key player in digital payments and digital finance should be a priority for Europe.
As Mario Draghi pointed out in his recent report, the productivity gap between the United States and the European Union is mostly explained by technology and finance.[1] If we take the information and communications technology (ICT) and financial sectors out, the gap disappears.
If we want to close the productivity gap with the United States, we need to focus on these areas. Digital payments and digital finance stand at the intersection of these two sectors. And they are developing fast, driven by changes in habits and technology. This is both an opportunity and a risk for Europe. It is an opportunity to close the gap by developing innovative and competitive European solutions. But if we do not seize that opportunity, we run the risk of weakening our competitiveness, resilience and strategic autonomy.
At the European Central Bank (ECB), as guardians of our single currency, the euro, we consider this a matter of crucial importance. Ultimately, it is about the future of our currency. Today, the euro is the second most important currency in the international monetary system. Its share across a range of indicators stands at around 20%, and the euro area accounts for around 12% of global GDP.[2] If we want to prevent the euro from losing importance on the global stage, transacting and investing in euro needs to be seen as safe, easy and efficient, even as digitalisation transforms payments and finance.[3]
Central bank money – the central pillar of the payments and financial system – has a key role to play in connecting the different parts of the financial system in a safe and risk-free way. This is particularly relevant in Europe, where payments and finance often remain fragmented along national lines, preventing us from fully reaping the benefits of the single European market. This is true for both retail and wholesale transactions.
For retail transactions – payments made on a daily basis by consumers and businesses – our reliance on non-European solutions weakens our strategic autonomy and is a drag on productivity growth. We should ask, for example, why we don’t have a European VISA or Mastercard. A digital euro – that is, central bank money in digital form for retail transactions – would give us the chance to increase efficiency, competition, innovation and resilience while allowing European private payment solutions to scale up and protect our monetary sovereignty.[4]
For wholesale transactions – transactions between financial institutions – we need to avoid repeating the mistake we made in the retail sector and ensure that we provide the conditions for European actors to stay ahead of their competitors. New technologies offer us the opportunity to create an integrated European market for digital assets from the outset, in other words a European capital markets union.[5]
A digital euro for everyday payments
For firms and households, central bank money is currently only available in the form of cash; there is currently no equivalent in digital form, which is becoming increasingly problematic because the use and acceptance of cash are declining. In the euro area, cash transactions have fallen below card transactions in value.[6] The share of companies reporting that they do not accept cash has tripled over the last three years to 12%.[7] The European Commission has put forward a legislative proposal to ensure the acceptance of cash[8], and the ECB is committed to ensuring that cash remains as widely available and accessible as possible[9]. Still, the trend towards cash being used less for daily transactions is likely to continue owing to the digitalisation of the economy in line with what has been observed in many advanced economies.

Day-to-day payments in the euro area by payment instrument, in value terms

(percentage of the value of all non-recurring day-to-day payments)

Source: ECB (2024), Study on the payment attitudes of consumers in the euro area (SPACE).
Note: The “Other” category includes bank cheques, credit transfers, direct debit, instant payments, loyalty points, vouchers and gift cards, crypto-assets, buy-now-pay-later services and other payment instruments.

Current European digital payment solutions, such as cards issued by European payment schemes, mainly cater to national markets and specific use cases. To pay across European countries, consumers have to rely on a few non-European providers. More than two-thirds of card transactions in the euro area were settled through international payment schemes in the second half of 2023.[10] And 13 out of 20 euro area countries rely entirely on non-European solutions in the absence of their own domestic payment scheme. But even those international payment solutions are not accepted everywhere and do not cover all key use cases.

National card schemes in the euro area

Source: ECB.

As a result, one of the key objectives of central bank money – to offer the public a means of payment backed by the sovereign authority that can be used for retail transactions across the entire currency area – is not being fulfilled in the digital space.
In addition, European payments have become a prime example of the situation that Enrico Letta and Mario Draghi described in their recent reports.[11] The fragmentation of the market along national lines, the lack of European payment solutions available on a European scale and the difficulty faced by European payment service providers in keeping pace with technological advances mean that Europe is not competitive within its own market, let alone on a global scale.
Moreover, in an unstable geopolitical environment, we are being left to rely on companies based in other countries. In future, this dependency could extend beyond traditional payment service providers. Platforms like Ant Group’s Alipay have shown they know how to bridge geographical gaps: during major events like UEFA EURO 2024 they were able to boost their payment app usage among customers in Europe.
Merchants – and consumers, who bear the costs – are left to deal with the consequences of the international card schemes’ market dominance. To give just one example, the average net merchant service charges in the EU almost doubled between 2018 and 2022.[12] This increase occurred despite regulatory efforts to contain it. And the cost falls disproportionately on smaller retailers, who face charges that are three to four times higher than those paid by their larger counterparts.[13]
We must move swiftly to counter the risks stemming from Europe’s current inability to secure the integration and autonomy of its retail payment system. This is one of the key reasons behind the digital euro project: to bring central bank money into the digital age. Doing so would provide firms and households with a digital equivalent to banknotes and would strengthen our monetary sovereignty.
Benefits for consumers and merchants
Complementing banknotes, the digital euro would give all European citizens and firms the freedom to make and receive digital payments seamlessly.[14]
The digital euro would provide a single, easy, secure and universally accepted public solution for digital payments in stores, online and from person to person. It would be available both online and offline, and would be free for basic use.
For merchants, the digital euro would provide seamless access to all European consumers. Moreover, it would offer an alternative that would increase competition, thereby lowering transaction costs in a more direct way than is possible through regulations and competition authorities.[15]
Fostering competition and innovation in an integrated payments ecosystem
The digital euro would strengthen the euro area economy by fostering competition and innovation.
European payment service providers are finding it increasingly difficult to compete with international card schemes and mobile payment solutions. As the latter grow in popularity, banks risk falling behind not only in terms of interchange fees, but also in terms of client relationships and user data.
By contrast, the digital euro would ensure that payment service providers would continue to play a central role, thus enabling them to maintain customer relationships and be compensated for their services, as is currently the case.[16] It would also offer an alternative to co-badging with international card schemes for cross-border payments in – and potentially beyond – the euro area, thus promoting competition.
The digital euro would also expand the opportunities available to payment service providers while reducing the cost of offering their own services on a European scale. In addition, it would foster an environment conducive to the widespread adoption of payment innovations throughout the euro area.
Currently, several innovations aimed at simplifying payments are emerging within specific national markets or across a few countries, driven by European payment service providers. Although these innovations are highly commendable and would enhance people’s lives, existing structural barriers are hampering their efforts to achieve pan-European scale.
These solutions are struggling to achieve the scale needed to provide a service to everyone in the euro area. This limits their ability to compete effectively with the large international players who can fully leverage economies of scale, even on a global level.
The European Commission’s legislative proposal[17] foresees that the digital euro would have legal tender status; this implies that it would be accepted by all merchants who currently accept electronic payments. In reality this would equate to the creation of a pan-European network which could also be used by private solutions, thus overcoming the obstacles limiting their growth.
This would foster a more integrated European payments market. As private providers expand their geographical reach and diversify their product portfolios, they will benefit from cost efficiencies and be better positioned to compete internationally.
In essence, the network effects generated by a digital euro would function as a public good, benefiting both public and private initiatives. This approach would be akin to creating a unified European railway network or European energy grid, where various companies could competitively operate their own services and deliver added value to customers.
Instead of requiring significant investment to expand existing services across the euro area, the open digital euro standards would facilitate cost-effective standardisation, making it possible for private retail payment solution providers to launch new products and functionalities on a broader scale.
Ultimately, whether through the digital euro or private solutions, this framework would unlock innovation, create new business opportunities and improve consumer access to a diverse range of goods and services.
Making this vision a shared reality
The design of the digital euro, as well as the key provision in the regulation proposed by the European Commission, contains all the key elements required to make this vision a reality.
Over the past years, we have extensively engaged with a multitude of market stakeholders to establish the digital euro’s features. We have collected and discussed the input of representatives of consumers, merchants, banks and payment service providers. Furthermore, we are now looking at how the digital euro could be used to provide services currently not available on the market. To this end, we launched a call for expressions of interest, asking for collaboration from stakeholders, and we received a very strong response. Through this inclusive approach, we want to take everyone’s needs and perspectives into consideration to produce a robust payments solution.
The role of central bank money in developing a European market for digital assets
Currently, the ECB and the national central banks of those EU Member States whose currency is the euro (which we collectively refer to as the Eurosystem) offer central bank money in digital form to financial institutions through our TARGET Services: T2 settles more than 90% of the value of large payments between financial institutions, and T2S settles securities transactions. These services have been crucial in increasing the efficiency and integration of post-trade platforms in Europe.
We are committed to continuing to provide state-of-the-art settlement services in central bank money, even as new technologies emerge.
The potential of new technologies
In this respect, we recognise the potential of new technologies, such as distributed ledger technology (DLT), to transform and improve wholesale financial markets by enabling assets to be issued or represented in digital token form.
DLT allows market participants to handle trading, settlement and custody on the same platform, reducing credit risk, transaction failures and reconciliation needs. It can enhance efficiency by operating on a 24/7, 365 days a year basis and settling transactions instantly, which could potentially reduce annual infrastructure operational costs. A shared DLT platform could lower market entry barriers, enable small and medium-sized enterprises and new players to access capital markets and facilitate the efficient trading of financial instruments currently not covered on regulated markets.
We have an opportunity to create an integrated European capital market for digital assets from the outset – in other words, a digital capital markets union.[18]
In fact, we have recently seen an upsurge in DLT initiatives in Europe. Over 60% of EU banks are exploring or using DLT, with 22% already implementing DLT applications. Furthermore, on the securities side, there has been an increasing number of issuances on DLT.
The role of central bank money and the Eurosystem’s exploratory work
The ECB is aware that it has a role to play in this work from the very beginning.
The availability of central bank money to settle transactions using these new technologies is important for two reasons. First, if we don’t use central bank money, other settlement assets – such as stablecoins or tokenised deposits – will be used, which would reintroduce credit risks and fragmentation in the financial system. And second, the possibility to settle in central bank money is seen by the market as a key factor in the adoption of new technologies.
The Eurosystem has already worked with the market to test settling wholesale transactions in central bank money using DLT. In exploratory work we carried out in 2024, for example, we offered three different solutions to link our TARGET services to market DLT platforms. This allowed industry participants to either settle real transactions in central bank money or conduct experiments with mock transactions.[19]
This exploratory work stands out at the global level in terms of its scale and scope. Overall, 60 industry participants took part, including incumbents and new entrants. More than 40 experiments and trials covered a wide range of securities and payments use cases, including the first issuance of an EU sovereign bond using DLT. A total value of €1.6 billion was settled via trials over a six-month period, exceeding values settled in comparable initiatives in other jurisdictions.
Next steps
In the short term, the Eurosystem will aim to make it possible to settle DLT transactions in central bank money, with a view to enabling the further development of DLT on the market.[20] The technological solution will be based on interoperability between market DLTs and the Eurosystem, but also – and this is crucial – between market platforms, based on strong and enforceable standards.
Looking further ahead, we will investigate how DLT can be used to create a more integrated financial market. With new technology, there is the opportunity to create a new ecosystem from scratch in a more integrated and harmonised manner. One way to achieve this integrated ecosystem in the longer term would be to move towards a European shared ledger. This would bring together token versions of central bank money, commercial bank money and other digital assets on a shared, programmable platform, on which market participants could provide their services. Another option could be the coordinated development of an ecosystem of fully interoperable technical solutions, which might better serve specific use cases and enable legacy and new solutions to coexist.
The trade-offs between the benefits of such flexibility and those of bringing everyone together on one platform need further analysis. We will reflect on these trade-offs and refine this long-term vision together with private and public sector stakeholders.
Conclusion
In the current fast-moving environment, Europe cannot stand still. If we do not bring central bank money into the digital age, we will hamper Europe’s competitiveness, resilience and strategic autonomy. And we will miss out on the opportunities that digital payments and digital finance offer. Others would reap the benefits instead.
By ensuring that central bank money keeps pace with digitalisation and new technologies, we would safeguard our monetary sovereignty. We would overcome fragmentation by offering money that can be used for any digital transactions in the euro area. We would foster competition and innovation. And we would strengthen our autonomy and resilience.

See Draghi, M. (2024), The future of European competitiveness, September, in particular the box entitled “A closer look at the role of the ICT sector in the EU-US labour productivity gap” on page 27.
See ECB (2024), The international role of the euro, June.
See Cipollone, P. (2024), “Why Europe must safeguard its global currency status”, Financial Times, 11 June.
See also Cipollone, P. (2024), “Monetary sovereignty in the digital age: the case for a digital euro”, keynote speech at the Economics of Payments XIII Conference organised by the Oesterreichische Nationalbank, 27 September.
See also Cipollone, P. (2024), “Towards a digital capital markets union”, keynote speech at the Bundesbank Symposium on the Future of Payments, 7 October.
See ECB (2024), Study on the payment attitudes of consumers in the euro area (SPACE).
The share of companies not accepting cash has increased from 4% in 2021 to 12% in 2024 in the euro area. See ECB (2024), Use of cash by companies in the euro area in 2024, 18 September.
In June 2023 the European Commission tabled a legislative proposal on the legal tender of euro cash to safeguard the role of cash and ensure it is widely accepted as a means of payment and remains easily accessible for people and businesses across the euro area. See European Commission (2023), “Single Currency Package: new proposals to support the use of cash and to propose a framework for a digital euro”, press release, 28 June.
The Eurosystem cash strategy aims to ensure that euro cash remains widely available, accessible and accepted as both a means of payment and a store of value.
The share of international card schemes in total electronically initiated card payments with cards issued in the euro area was about 68% in value and 72% in volume for the second half of 2023, based on data collected under Regulation (EU) No 1409/2013 of the European Central Bank on payments statistics (ECB/2013/43).
Letta, E. (2024), Much more than a market, April; Draghi, M. (2024), The future of European competitiveness, September.
See European Commission (2024), Study on new developments in card-based payment markets, including as regards relevant aspects of the application of the Interchange Fee Regulation – Final Report, February.
EHI, Zahlungssysteme im Einzelhandel 2023; European Commission (2024), op. cit.
See also Cipollone, P. (2024), “The digital euro: what’s in it for you?”, The ECB Blog, 1 November, and Cipollone, P. (2024), “Maintaining the freedom to choose how we pay”, The ECB Blog, 25 June.
See also Cipollone, P. (2024), “From dependency to autonomy: the role of a digital euro in the European payment landscape”, Introductory statement at the Committee on Economic and Monetary Affairs of the European Parliament, 23 September.
The draft legislation envisages a compensation model with fair economic incentives for all involved (e.g. consumers, merchants and banks) in line with the following principles: (i) as a public good, a digital euro would be free of charge for basic use; (ii) payment service providers would charge merchants fees for providing digital euro-related services to offset the operational costs of distributing a digital euro, as is the case today for other digital means of payment; payment service providers would also be able to develop additional digital euro services for their customers, on top of those required for basic use; (iii) the fees that merchants pay payment service providers for digital euro services would be subject to a cap to provide adequate safeguards against excessive charges, as outlined by the European Commission in its legislative proposal on a digital euro; (iv) like for the production of banknotes, the Eurosystem would bear the issuance costs.
See European Commission (2023), “Single Currency Package: new proposals to support the use of cash and to propose a framework for a digital euro”, press release, 28 June.
Cipollone, P. (2024), “Towards a digital capital markets union”, keynote speech at the Bundesbank Symposium on the Future of Payments, 7 October.
See ECB (2024), “Exploratory work on new technologies for wholesale central bank money settlement”.
ECB (2025), “Eurosystem expands initiative to settle DLT-based transactions in central bank money”, 20 February.

 
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The European Commission has adopted a new package of proposals to simplify EU rules, boost competitiveness, and unlock additional investment capacity. This is a major step forward in creating a more favourable business environment to help EU companies grow, innovate, and create quality jobs.
By bringing our competitiveness and climate goals together, we are creating the conditions for EU businesses to thrive, attract investment, achieve our shared goals – such as the European Green Deal objectives – and unlock our full economic potential.
The Commission has a clear target to deliver an unprecedented simplification effort, by achieving at least 25% reduction in administrative burdens, and at least 35% for SMEs until the end of this mandate. These first ‘Omnibus’ packages, bringing together proposals in a number of related legislative fields, cover a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence, EU Taxonomy, carbon border adjustment mechanism, and European investment programmes.
These proposals will reduce complexity of EU requirements for all businesses, notably SMEs and small mid-caps, focus our regulatory framework on the largest companies which are likely to have a bigger impact on the climate and the environment, while still enabling companies to access sustainable finance for their clean transition.
If adopted and implemented as set out today, the proposals are conservatively estimated to bring total savings in annual administrative costs of around €6.3 billion and to mobilise additional public and private investment capacity of €50 billion to support policy priorities.
President Ursula von der Leyen said: “Simplification promised, simplification delivered! We are presenting our first proposal for far-reaching simplification. EU companies will benefit from streamlined rules on sustainable finance reporting, sustainability due diligence and taxonomy. This will make life easier for our businesses while ensuring we stay firmly on course toward our decarbonisation goals. And more simplification is on the way”.
 
Making sustainability reporting more accessible and efficient
Specifically, the main changes in the area of sustainability reporting (CSRD and EU Taxonomy) will:

Remove around 80% of companies from the scope of CSRD, focusing the sustainability reporting obligations on the largest companies which are more likely to have the biggest impacts on people and the environment;
Ensure that sustainability reporting requirements on large companies do not burden smaller companies in their value chains;
Postpone by two years (until 2028) the reporting requirements for companies currently in the scope of CSRD and which are required to report as of 2026 or 2027.
Reduce the burden of the EU Taxonomy reporting obligations and limit it to the largest companies (corresponding to the scope of the CSDDD),  while keeping the possibility to report voluntarily for the other large companies within the future scope of the CSRD. This is expected to deliver significant cost savings for smaller companies, while allowing businesses that wish to access sustainable finance to continue that reporting.
Introduce the option of reporting on activities that are partially aligned with the EU Taxonomy, fostering a gradual environmental transition of activities over time, in line with the aim to scale up transition finance to help companies on their path towards sustainability.
Introduce a financial materiality threshold for the Taxonomy reporting and reduce the reporting templates by around 70%.
Introduce simplifications to the most complex “Do no Significant harm” (DNSH) criteria for pollution prevention and control related to the use and presence of chemicals that apply horizontally to all economic sectors under the EU Taxonomy – as a first step in revising and simplifying all such DNSH criteria.
Adjust, among others, the main Taxonomy-based key performance indicator for banks, the Green Asset Ratio (GAR). Banks will be able to exclude from the denominator of the GAR exposures that relate to undertakings which are outside the future scope of the CSRD (i.e. companies with less than 1000 employees and €50m turnover).

 
Simplifying due diligence to support responsible business practices
The main changes in the area of sustainability due diligence will:

Simplify sustainability due diligence requirements so that companies in scope avoid unnecessary complexities and costs, e.g. by focusing systematic due diligence requirements on direct business partners; and by reducing the frequency of periodic assessments and monitoring of their partners from annual to 5 years, with ad hoc assessments where necessary.
Reduce burdens and trickle-down effects for SMEs and  and small mid-caps by limiting the amount of information that may be requested as part of the value chain mapping by large companies;
Further increase the harmonisation of due diligence requirements to ensure a level playing field across the EU;
Remove the EU civil liability conditions while preserving victims’ right to full compensation for damage caused by non-compliance, and protecting companies against over-compensation, under the civil liability regimes of Member States; and
Give companies more time to prepare to comply with the new requirements by postponing the application of the sustainability due diligence requirements for the largest companies by one year (to 26 July 2028), while advancing the adoption of the guidelines by one year (to July 2026).

 
Simplifying the carbon border adjustment mechanism (CBAM) for a fairer trade
The main changes on CBAM will:

Exempt small importers from CBAM obligations, mostly SMEs and individuals. These are importers who import small quantities of CBAM goods, representing very small quantities of embedded emissions entering the Union from third countries. This works by introducing a new CBAM cumulative annual threshold of 50 tonnes per importer, thus eliminating CBAM obligations for approximately 182,000 or 90% of importers, mostly SMEs, while still covering over 99% emissions in scope.

Simplify the rules for companies that remain in CBAM scope: on authorisation of CBAM declarants, as well as the rules related to CBAM obligations, including the calculation of embedded emissions and reporting requirements.

Make CBAM more effective in the long term, by strengthening the rules to avoid circumvention and abuse.
This simplification precedes a future extension of CBAM to other ETS sectors, downstream goods, followed by new legislative proposal on the scope extension of CBAM in early 2026.

 
Unlocking investment opportunities
The Commission is also proposing a series of amendments to simplify and optimise the use of several investment programs including InvestEU, EFSI, and legacy financial instruments.
InvestEU, the EU’s largest risk-sharing instrument to support priority investments within the Union, plays a key role in addressing financial barriers and driving the investments needed for competitiveness, research and innovation, decarbonisation, environmental sustainability and skills. Currently, close to 45 % of its operations are supporting climate objectives.
The proposed changes:

Increase the EU’s investment capacity through the use of returns from past investments, as well as optimised use of funds still available under the legacy instruments, thus allowing for more funding to be made available to businesses. This is expected to mobilise around €50 billion in additional public and private investments. The increased InvestEU capacity will be mainly used to finance more innovative activities in support of priority policies, such as the Competitiveness Compass and the Clean Industrial Deal.

Make it easier for Member States to contribute to the programme and support their own businesses and mobilise private  investments.

Simplify administrative requirements for our implementing partners, financial intermediaries and final recipients, notably SMEs. The simplification measures proposed are expected to generate €350 million in cost savings.

 
Next steps
The legislative proposals will now be submitted to the European Parliament and the Council for their consideration and adoption. The changes on the CSRD, CSDDD, and CBAM will enter into force once the co-legislators have reached an agreement on the proposals and after publication in the EU Official Journal. In line with the Communication on simplification and implementation published on 11 January 2024, the Commission invites the co-legislators to treat this omnibus package with priority, in particular the proposal postponing certain disclosure requirements under the CSRD and the transposition deadline under CSDDD, as they aim to address key concerns identified by stakeholders.
The draft Delegated Act amending the current delegated acts under the Taxonomy Regulation will be adopted after public feedback and will apply at the end of the scrutiny period by the European Parliament and the Council.
 
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