The euro fell to its lowest level against the dollar since May 2025 on Monday as investors reacted to rising French borrowing costs, political uncertainty and doubts over Paris’s ability to stabilise its public finances before next year’s presidential election.

The euro fell to a 17-month low against the US dollar on Monday as renewed pressure on French government debt raised concern over the fiscal position of the eurozone’s second-largest economy.

The single currency dropped as far as $1.116 during trading, its weakest level since May 2025, before recovering part of the fall. By late Monday it was trading at around $1.121, still lower on the day.

The move followed a sharp sell-off in French government bonds and a widening gap between French and German borrowing costs.

According to market data published on Monday, the spread between French government debt and equivalent German Bunds had approached 160 basis points on Friday, its widest level since the eurozone sovereign-debt crisis in 2011.

The gap subsequently narrowed, but the scale of the movement has drawn attention back to France’s public finances.

French debt is already close to 120 per cent of gross domestic product and is expected to continue rising.

Investors are now assessing whether Prime Minister Sébastien Lecornu’s minority government can secure sufficient parliamentary support for measures intended to put the budget on a more sustainable path.

That challenge is becoming more difficult as France approaches its 2027 presidential election.

Spending cuts and tax increases are politically sensitive even under stable parliamentary conditions. Lecornu’s administration does not have an outright majority in the National Assembly, while opposition parties have challenged several elements of the government’s fiscal programme.

The French economy itself is providing little additional room.

Revised national accounts examined by EU Today showed that the economy failed to grow during the second quarter, while household purchasing power weakened and investment declined.

Slower growth makes deficit reduction harder because tax revenues tend to grow more slowly while welfare and debt-servicing costs remain high.

Bond markets have also changed the calculation.

For much of the period following the eurozone debt crisis, France was able to borrow at historically low rates. Higher interest rates now mean maturing debt has to be refinanced at greater cost.

France’s debt burden is therefore rising at the same time as the price of servicing it increases.

The euro’s fall on Monday shows that those concerns are no longer confined to the French bond market.

Currency traders are also assessing whether fiscal pressure in France could affect confidence in the wider euro area.

The comparison with the sovereign-debt crisis of 2010–12 should nevertheless be treated cautiously.

France remains one of Europe’s largest and most diversified economies, and the eurozone now has institutional mechanisms and European Central Bank instruments that did not exist at the beginning of the earlier crisis.

There is also no indication that France is unable to finance itself.

What markets are pricing is an increase in the risk attached to holding French debt and growing uncertainty over the country’s medium-term fiscal trajectory.

The euro has now fallen for four successive weeks against the dollar and has lost more than three per cent over that period.

US monetary policy is contributing to the movement. Persistent inflation indicators have supported the dollar even as expectations of an immediate Federal Reserve interest-rate increase have declined.

For Europe, however, Monday’s trading was dominated by France.

French fiscal policy has been a domestic political dispute for much of the past year. The widening bond spread and the euro’s fall show that it is increasingly becoming a eurozone market issue.

La Bce lavora all’introduzione dell’euro digitale. Seppure molto diversa, l’iniziativa richiama il Chicago Plan nato come risposta alla Grande Depressione. Non un progetto contro le banche, ma un nuovo equilibrio tra iniziativa privata e moneta pubblica.

L'articolo La moneta dal Chicago Plan all’euro digitale proviene da Lavoce.info.

As negotiations enter their final phase in Brussels, the ECB's electronic money project for 2029 transcends the technical aspects. It is a geopolitical imperative in the face of American payment giants.

The European Union's financial landscape is poised for its biggest transformation since the introduction of banknotes in 2002. The European Parliament, the Council, and the European Central Bank (ECB) are intensifying their discussions to finalize the regulatory framework for the digital euro. If the draft legislation is adopted as planned by the end of the year, the first large-scale practical tests with financial institutions will begin in the autumn of 2027.

The goal? Official rollout to citizens by 2029.

This gradual rollout is not accidental. It is designed to guarantee the stability of an interconnected banking system. The digital euro will not be a private or speculative cryptocurrency, but rather an electronic extension of fiat money, issued and guaranteed directly by the ECB. It will function as a direct complement to coins and banknotes, without ever replacing them.

For European citizens, this innovation will represent a public and sovereign alternative to the private tech and credit giants. In practical terms, everyone will be able to use these services directly through their own commercial bank's app.

The major technical advance lies in offline use.

Money transfers between devices will occur simply by being near each other, even without an internet connection or in the event of a power outage. This option will also guarantee complete confidentiality, since peer-to-peer transactions will not pass through commercial servers.

To reassure the traditional banking sector and prevent a massive flight of deposits during the crisis, the ECB will impose a strict limit. The current holding ceiling is €3,000 per person. Any excess amount received in this public wallet will automatically be transferred to the user's regular commercial bank account.

Beyond the technical aspects, the issue is crucial for the real economy, particularly for small and medium-sized enterprises (SMEs) and the tourism sector within the single market. Currently, almost all European merchants rely on payment infrastructures controlled by American companies, such as Visa and Mastercard. With each transaction, the local economy relinquishes a portion of its profit margins in intermediation fees.

The digital euro aims to break this dependence.

The European Parliament is pushing for acceptance fees imposed on merchants to be significantly lower than current rates, or even completely free for microtransactions.

Intra-European tourism will also benefit from increased fluidity. A traveler will be able to pay for their expenses instantly in any member state using their home country's electronic wallet, without friction, without going through third-party networks and without hidden cross-border fees.

Despite the Commission's optimistic pronouncements, the European banking sector remains on the defensive. Banks are concerned about the operational costs associated with upgrading their technological systems, but above all about the risk of liquidity loss if clients choose to place their funds under the direct custody of the central bank.

The decisions made in the coming months will therefore be highly political. The challenge will be to define the necessary economic incentives for banks to agree to distribute this currency. For the European Union, the 2029 deadline provides the necessary time to orchestrate this new era of financial autonomy and strategic sovereignty.

T2 è il sistema attraverso cui le banche dell’Eurozona regolano i pagamenti tra loro in tempo reale. Non ha sostituti: se si ferma, si fermano tutte le operazioni. Una situazione che diventa preoccupante di fronte alla possibilità di attacchi informatici.

L'articolo Manca un piano B per l’infrastruttura che regge l’euro proviene da Lavoce.info.