The ECB’s digital euro team is coming apart
It’s not just political enthusiasm that’s waning for the digital euro. Staff are abandoning the project too.
POLITICO has learned that around 30 percent of the team planning the minting of virtual euro banknotes and coins have left the team during the year, including IT technicians and three secretaries, just as the central bank moves into the key development stage.
The risk is the exodus will delay a project that the ECB sees as central to defending the supremacy of central bank money in a digital world festooned with cryptocurrency and other virtual money plans backed by Big Tech.
The exodus has spread to the very top: Fabio Panetta, the ECB board member in charge of payments — and thus responsible for the digital euro project — jumped ship in the summer, less than halfway through his eight-year contract, to take up the governorship of the Bank of Italy. Panetta, who was replaced by fellow Italian Piero Cipollone in November, was the first board member in the ECB’s 25 years of operations to leave voluntarily for a job back home.
Two more body blows have come in recent weeks with the departures of senior advisor Christian Schäfer and his German compatriot Jürgen Schaaf, the team’s communications advisor. Both reported directly to the ECB’s digital euro project leader, ING veteran Evelien Witlox, who reports in turn to Ulrich Bindseil, director-general for market infrastructure and payments.
Schäfer, widely considered the intellectual heavyweight of the project, decided not to renew his contract as an external advisor — a surprising move given that he joined the team only at the start of the year after 15 years at Deutsche Bank.
Schaaf will stay at the ECB’s Market Infrastructure & Payments directorate-general, but outside the digital euro project. Neither were available for comment.
Two former team members, who spoke on the condition of anonymity so they could talk freely, blamed the project managers, whom they accused of an aggressive and micro-managing style. A third said the strict atmosphere within the team is rather a problem of the ECB as an institution than the fault of individual people.
An anonymous staff chat board, discussing talk of bullying at the digital euro team while the central bank is looking for internal hires, suggests that not all is rosy. One entry seen by POLITICO cited talk from “team members on diverse levels” that painted a picture of “aggressive management behavior, allowed and condoned obviously by the responsible senior management.”
Other entries reflected disappointment at the atmosphere at the ECB more widely, especially after an internal survey earlier this year showed that a large number of staff reported having been “shouted at or spoken to in an aggressive tone,” or having received “offensive gestures.” It isn’t clear, however, how much of that was specific to the digital euro team.
Management confirmed in organizational upgrade
The ECB isn’t letting itself be knocked off course, though. One of the decisions the Governing Council took at its December meeting was to upgrade the team, temporarily, to a full directorate within the payments division, effective as of February. In doing so, it confirmed Witlox as ‘Director Digital Euro’ and her right-hand man, Ignacio Terol, as senior advisor in the directorate’s strategy unit.
Mayte Arráez Gonzalez, a project manager since November 2021, was appointed head of end-to-end product and delivery at the same time. However, she was the only head of five separate workstreams (three divisions and two units) to be confirmed in her job. Finding heads for the other four workstreams is still a work in progress.
“I am impressed with the professionalism and integrity of the leadership team and staff of the digital euro project,” Bindseil told POLITICO, with a nod to the confirmation of the current management in their posts. “In addition, the ECB has a diverse set of confidential procedures for reporting and investigating any inappropriate behavior, and staff is strongly encouraged to use them in such situations.”
Race against time
The ECB says staff departures from the team are high by design. “The turnover in the digital euro team relates to the nature of the project, which is marked by an ongoing exchange with colleagues from Eurosystem national central banks, and by the temporary nature of some assignments,” a spokeswoman said.
But staff turnover at the ECB is usually very low. So low, in fact, that the Frankfurt-based institution usually gives career advantages to staff who are willing to switch between teams.
Assuming staff exits don’t affect the timeline, the ECB’s goal is to be able to launch a functional digital euro in a little more than two years. But digital euros will only land in virtual wallets on people’s smartphones if eurozone governors and, crucially, Brussels lawmakers give the project their final blessing.
And it’s here that the team may most feel the loss of someone like the experienced and widely-respected Schaaf. The strong political support the digital euro enjoyed two years ago is waning, with many unable to see any benefit from a digital euro that would justify the risks that it might create for both personal privacy and the broader stability of the financial system.
Those concerns may not have penetrated the ECB’s towers just yet. The bank has rubbished all talk of using the digital euro to spy on people’s spending habits, and has pledged to implement high levels of payment privacy. It also says it would design the digital euro specifically to avoid creating financial stability risks.
“In my experience with the digital euro and the contacts via the ECB, there’s quite a narrow mindset,” said Michiel Hoogeveen, a Dutch MEP working on the digital euro’s legal framework on behalf of the European Conservatives and Reformists group. “They believe they are working on something ground-breaking, and I don’t always have the feeling that a very critical or skeptical voice towards the digital euro is appreciated.”
