FT News Briefing Will the digital euro come online?
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May 18, 2023 Ukraine’s allies are anxious that U.S. military support may dwindle during the upcoming election cycle. Meanwhile, Japan's stock market hits a 33-year high, signaling renewed investor interest. The European Central Bank is pushing for a digital euro, but Europeans seem skeptical, with protests highlighting their concerns over surveillance and bank stability. As cash usage declines, the digital euro's necessity is questioned, leaving many to wonder if it’s a solution searching for a problem.
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Ukraine Aid Uncertainty
- European officials worry that the 2024 U.S. presidential election might impact military aid to Ukraine.
- With potential funding secured only until October, the upcoming counteroffensive's outcome becomes crucial.
Japanese Stock Surge
- The Nikkei 225 reached a 33-year high, driven by investors perceiving less geopolitical risk in Japan compared to China.
- Corporate governance reforms and Warren Buffett's recent investment contribute to increased confidence in Japanese companies.
Digital Euro Concerns
- The European Central Bank is developing a digital euro, aiming to mirror cash usage and address concerns like the decline of physical currency.
- However, public support is low, with many questioning its purpose and fearing government surveillance of transactions.