Digital euro as a complement to cash
Last summer, the EU Commission presented the draft regulation for the digital euro.  It is intended to support the modernisation of the European financial system, facilitate European payment transactions, lead to more privacy, enable offline payments and be easily accessible. At the same time, the move should help to tackle fraud and ensure greater security, also in comparison to other digital means of payment such as Bitcoin and others. From AK's point of view, a digital euro that works both online and offline in the same way as cash would be a significant innovation for consumers. In order for the digital euro to be accepted as a means of payment, a comprehensive mandatory acceptance is planned. Banks and public authorities or post offices are to offer free basic services for the digital euro. At the same time, in order to ensure the status of established cash, the EU Commission is proposing a mandatory acceptance and rules on availability (e.g. ATM network) for euro cash.

Points of criticism from a consumer policy perspective
As an anonymous and free means of payment, the new payment method would be a useful addition to cash for many consumers. AK therefore welcomes the proposed reforms in principle, but also has reservations. The exemptions for the obligation to accept the digital euro are too broadly defined; with a threshold of 2 million annual turnover or 10 employees, for example, a significant proportion of companies in Austria would not be covered by the obligation to accept the digital euro. Furthermore, the regulation entails additional exceptions, which create loopholes for companies and are therefore rejected by the AK. With regard to the planned free basic services for the digital euro, AK is in favour of information obligations in order to prevent these services from being hidden, as is currently the case with basic bank accounts, which financial institutions are legally required to offer.

Like cash, the digital euro should be available not only as a means of payment, but also as a store of value. Whether and when the digital euro will actually be issued has not yet been finalised and will only be decided at a later date. The EU Parliament's Committee on Economic and Monetary Affairs will vote on the proposal at the beginning of April.

In the draft regulation on euro cash, the AK criticises flaws in the measures to ensure cash acceptance. Above all, the fact that the Member States can only take retrospective action in the event of acceptance problems is not considered to be an effective measure. AK calls for a ban on ex ante exclusions, which companies have already been stipulating for several years, for example by restricting payment transactions to card payments only. In the view of AK, there should only be exceptions if cash payment is not customary due to the nature of the contractual relationship, for example in the case of insurance or telecoms contracts or online purchases.

Retail Investment Strategy
The EU Commission not only wants to modernise the means of payment, but also attract more consumers to EU capital markets. The Retail Investment Strategy proposed in May last year is intended to facilitate access to financial markets and improve the protection of small investors. This applies to capital market investments as well as insurance policies such as life insurance or private pension schemes. The EU Parliament's Economic and Monetary Affairs Committee will vote on the proposal on 20 March 2024. AK is critical of the basic intention of the Retail Investment Strategy. Risk-averse savers should not be lured into acquiring securities without reflection or be pressurised into acquiring risky securities. Nevertheless, many of the proposed rules to protect small investors are to be welcomed from a consumer policy perspective. 

AK criticism
The Retail Investment Strategy provides for a partial inducement ban for financial services and insurance intermediaries. Furthermore, benchmark values for better orientation of investors and stricter rules for so called finfluencers are planned in order to tackle misleading marketing in the social media sector. These measures are intended to strengthen consumer confidence and increase willingness to invest.

AK welcomes the proposed inducement ban in principle and the fact that it is to apply equally to both areas - securities and insurance - in the field of independent advice. However, a number of ancillary conditions and exceptions are envisaged, which make it difficult to understand and dilute its effectiveness: The inducement ban is to apply to independent advice as well as advice-free sales (insurance investment products) and, in the area of securities, to execution-only transactions. However, there are restrictions to the inducement ban which, in the view of AK, lead to loopholes and should therefore be removed. In the area of insurance, for example, an exception is provided for advice-free sales if the inducement is "necessary" for the provision of the sales service. The inducement ban should also apply here. Another key point of criticism from AK concerns the rules on the disclosure of the amount of the inducement. Inducements should be mandatory and automatically stated in euro amounts (instead of as a percentage).

AK proposal:
In addition to the partial inducement ban proposed by the EU Commission, AK proposes that advisors and intermediaries should be obliged to present various remuneration options for insurance investment products in order to a) make consumers aware of the various cost and remuneration scenarios and b) enable them to choose a remuneration model on their own responsibility.

Further information:
AK EUROPA: Digital euro and euro cash from a consumer policy perspective
AK EUROPA: What does the digital euro mean for consumers?
BEUC: Recommendations on the legislative framework for the digital euro
Council: Towards a digital euro
AK EUROPA: Retail Investment Strategy
AK EUROPA: Capital Markets Union: Strategy for retail investors
BEUC: Public Consultation on a retail investment strategy for Europe