EU Economy & Trade Update: Big Tech Cryptocurrency, Africa’s New WTO Chief and Dependence on Asia Tech Firms

Written by | Friday, February 19th, 2021
@Eubulletin

BIG TECH CRYPTOCURRENCY PROJECTS — The European Central Bank (ECB) has issued a stark warning on the involvement of Big Tech firms in cryptocurrency projects, warning that such moves could jeopardize privacy, create further risks to fair competition and even „endanger monetary sovereignty.“ The warning comes as the ECB continues to mull over plans to introduce a digital euro, which it hopes could mitigate some of the risks posed by private firms establishing their own digital currencies. For its part, Facebook has had to postpone the launch of its ‘Diem’ currency, after a series of concerns were raised by regulators. In Europe, one of the biggest opponents so far has been France’s Finance Minister Bruno Le Maire, who has said that the move could lead to financial risks. Big Tech firms, Fabio Panetta, member of the ECB’s executive board and chair of the task force on a digital euro, warns “are seeking to sidestep traditional distribution networks including payment systems through their control of social media.” Moreover, Panetta said that the stability of the financial markets could be at risk, due to the rapid take of cryptocurrencies that large tech firms may be able to achieve with their expansive consumer base. In the same breath, meanwhile, Panetta took the opportunity to pitch the ECB’s own plans for a digital euro, a decision on which is expected to be put forth in April. The digital euro, he noted, would “give access to a safe illiquid asset which, unlike cash, and in the absence of design-related constraints, could potentially be held in large volumes at no cost.”
AFRICA’S NEW WTO CHIEF — The World Trade Organisation (WTO) appointed Ngozi Okonjo-Iweala as its new director-general on Monday (15 February). The WTO’s first female chief and the first one to come from the African continent takes the reins at a time when the organization needs to reform to respond to growing global challenges and trade tensions. Okonjo-Iweala was appointed as its seventh director-general, succeeding Roberto Azevedo. Her appointment by the required consensus of the 164 WTO members was possible only after the US decided to back her, as the previous Donald Trump Administration had blocked her name to support the South Korean candidate Yoo Myung-hee, who finally withdrew her candidacy. Okonjo-Iweala has taken over the WTO at arguably the most difficult period in its 26-year history, in great part due to the tensions triggered by Trump. European Commission executive vice-president in charge of trade, Valdis Dombrovskis, recalled that the EU supported her candidacy from the start, and expressed his willingness to work “closely with her to drive much-needed reform of the institution.” “She brings stature, she brings experience, a network and a temperament of trying to get things done, which is quite a welcome lot in my view,” former WTO chief Pascal Lamy told Reuters. “I think she’s a good choice.” Key to her success will be her ability to operate in the centre of a “U.S.-EU-China triangle”, he said.
DEPENDENCE ON ASIA TECH FIRMS — EU industry needs to produce more electronic components to reduce dependence on Asian manufacturers, French finance minister Bruno Le Maire said Monday (15 February). “It is essential to reinforce the European industrial strategy with the objectives of retaining Europe’s industrial capacities, developing them in the near future and assuring Europe’s strategic independence,” Le Maire said, speaking alongside the French EU single market commissioner Thierry Breton in Paris. In particular,

Le Maire called for a new plan on electronic components to reduce European dependence on Asian suppliers in the domain this year, which was unacceptable and was making the EU vulnerable in industries such as car manufacturing that had run short of some components from Asia. “We believe it is essential to reinforce the European industrial strategy with the objectives of retaining Europe’s industrial capacities, developing them in the near future and assuring Europe’s strategic independence,” Le Maire said.

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