The changing face of monetary sovereignty in the European Union - the impact of the digital euro proposals on the euroless Member States
(2025) JAEM01 20251Department of Law
Faculty of Law
- Abstract
- This Thesis explores the potential impact of the introduction of the digital euro upon the monetary sovereignty of Member States with a derogation. As the EU moves toward the issuance of a central bank digital currency, the question arises whether the widespread circulation of the digital euro may pre-empt formal euro accession and erode these Member States’ capacity to conduct autonomous monetary policy.
Firstly, chapter one introduces the evolving concept of monetary sovereignty, analysing its meaning and scope for both euro area countries and those with a derogation. Chapter two provides an overview of the legal and institutional framework underpinning the digital euro, outlining its key features, objectives, and the proposed legal... (More) - This Thesis explores the potential impact of the introduction of the digital euro upon the monetary sovereignty of Member States with a derogation. As the EU moves toward the issuance of a central bank digital currency, the question arises whether the widespread circulation of the digital euro may pre-empt formal euro accession and erode these Member States’ capacity to conduct autonomous monetary policy.
Firstly, chapter one introduces the evolving concept of monetary sovereignty, analysing its meaning and scope for both euro area countries and those with a derogation. Chapter two provides an overview of the legal and institutional framework underpinning the digital euro, outlining its key features, objectives, and the proposed legal approach towards non-euro area Member States. Building on this foundation, chapter three investigates the possible risks the digital euro poses to the monetary sovereignty of Member States with a derogation, particularly focusing on the problem of euroisation and increased volatility that the cross-border use of the digital euro might bring.
The final chapter answers the central research question by employing a dual understanding of monetary sovereignty in terms of so-called effective monetary sovereignty and secure monetary sovereignty. While the secure approach suggests that sovereignty would indeed be undermined, the effective approach indicates that the monetary sovereignty of Member States with a derogation remains intact due to their transitional status. Denmark, by contrast, stands apart due to its opt-out and is therefore uniquely vulnerable to sovereignty erosion regardless of the approach applied.
These findings highlight the importance of ample foresight and greater clarity in terms of the EU’s governance over the digital euro. As the digital euro moves from proposal to potential implementation, its cross-border effects on Member States with a derogation must not be overlooked. The Union should aim to foster inclusive engagement of the Member States with a derogation and to ensure a thoughtful policymaking and design of the digital euro to curtail its negative cross-border effects. Only then can the EU safeguard the cohesion of its monetary architecture while respecting the unique positions of all its Member States.
Keywords: digital euro, monetary sovereignty, Member States with a derogation, Denmark, CBDC, EU monetary integration, monetary policy (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9194666
- author
- Schejbalová, Kamila LU
- supervisor
- organization
- course
- JAEM01 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- language
- English
- id
- 9194666
- date added to LUP
- 2025-06-12 08:17:21
- date last changed
- 2025-06-12 08:17:21
@misc{9194666,
abstract = {{This Thesis explores the potential impact of the introduction of the digital euro upon the monetary sovereignty of Member States with a derogation. As the EU moves toward the issuance of a central bank digital currency, the question arises whether the widespread circulation of the digital euro may pre-empt formal euro accession and erode these Member States’ capacity to conduct autonomous monetary policy.
Firstly, chapter one introduces the evolving concept of monetary sovereignty, analysing its meaning and scope for both euro area countries and those with a derogation. Chapter two provides an overview of the legal and institutional framework underpinning the digital euro, outlining its key features, objectives, and the proposed legal approach towards non-euro area Member States. Building on this foundation, chapter three investigates the possible risks the digital euro poses to the monetary sovereignty of Member States with a derogation, particularly focusing on the problem of euroisation and increased volatility that the cross-border use of the digital euro might bring.
The final chapter answers the central research question by employing a dual understanding of monetary sovereignty in terms of so-called effective monetary sovereignty and secure monetary sovereignty. While the secure approach suggests that sovereignty would indeed be undermined, the effective approach indicates that the monetary sovereignty of Member States with a derogation remains intact due to their transitional status. Denmark, by contrast, stands apart due to its opt-out and is therefore uniquely vulnerable to sovereignty erosion regardless of the approach applied.
These findings highlight the importance of ample foresight and greater clarity in terms of the EU’s governance over the digital euro. As the digital euro moves from proposal to potential implementation, its cross-border effects on Member States with a derogation must not be overlooked. The Union should aim to foster inclusive engagement of the Member States with a derogation and to ensure a thoughtful policymaking and design of the digital euro to curtail its negative cross-border effects. Only then can the EU safeguard the cohesion of its monetary architecture while respecting the unique positions of all its Member States.
Keywords: digital euro, monetary sovereignty, Member States with a derogation, Denmark, CBDC, EU monetary integration, monetary policy}},
author = {{Schejbalová, Kamila}},
language = {{eng}},
note = {{Student Paper}},
title = {{The changing face of monetary sovereignty in the European Union - the impact of the digital euro proposals on the euroless Member States}},
year = {{2025}},
}