| The second political trilogue on the Single Currency Package is going on. Among the items on the table, per the Council Presidency’s own agenda, are the compensation model for the digital euro and the exceptions to mandatory cash acceptance. Public commentary on the digital euro’s fee structure has tended to blur what the Council has agreed, what Parliament is proposing, and what was raised and set aside. This note draws that distinction precisely, using the Presidency’s own working document of 31 August 2026, and then asks a question the trilogue agenda does not: if merchants are to be compensated for the cost of digital euro infrastructure, why does the equivalent question for cash infrastructure remain an unresolved proposal rather than an agreed principle? |
1. What is agreed: the Council’s compensation model
The Council reached its negotiating mandate on the Single Currency Package on 19 December 2025. On digital euro fees, that mandate rests on a single structural choice: merchant fees for accepting the digital euro are subject to a euro-area-uniform cap, set centrally rather than negotiated bilaterally between merchants and payment service providers. The Presidency’s note of 31 August 2026 states plainly that it “remains fully committed to the Council position on the compensation model, as agreed following extensive analysis and negotiations among Member States” prior to the 2025 mandate. This is the one part of the fee architecture that is settled Council policy, not a proposal under discussion.
The same document identifies a specific and consequential gap in that agreed model: it does not compensate offline digital euro transactions. Offline functionality — payment via local device storage, without a live connection to the ECB or an intermediary, designed to offer cash-like privacy and to work without network access — is precisely the digital euro’s answer to the resilience and privacy arguments usually made for cash. Under the Council’s own agreed mandate, the infrastructure enabling that offline capability currently has no funding mechanism built into the compensation model. This is not a Parliament complaint about the Council text; it is the Presidency’s own description of what its mandate currently does.
2. What Parliament is proposing — and what remains open
The Presidency’s note lists, as matters still to be resolved with Parliament, a set of proposals that are not part of the agreed Council position. Four of these bear directly on who ultimately pays for digital euro infrastructure:
| Proposal | What it would change | Status |
| “No-worse-off” derogation from the EA-uniform cap during a transitional period | Would allow fees above the uniform cap for a defined transition window, easing the adjustment for payment service providers | Parliament proposal; Council has not accepted it |
| Adjustments to the EA-uniform cap itself | Would revisit the level or structure of the cap agreed in the Council mandate | Parliament proposal; Presidency’s first priority is to understand its rationale, not to adopt it |
| Compensation for offline transactions | Would close the gap identified in Section 1 by extending the compensation model to offline use | Parliament proposal; absent from the Council’s December 2025 mandate |
| Pathway to a final cost-based fee model | Would move the compensation model from the current cap toward one based on the actual cost of providing digital euro services | Parliament proposal; not yet agreed |
| Proportionate treatment (flat or per-transaction fee) for small-value transactions at micro-enterprises | Would cap the cost to the smallest merchants of accepting low-value digital euro payments | Parliament proposal; the Presidency is actively seeking Member State views on it now |
None of these five items is current Council policy. All five are live negotiating positions that the second and third political trilogues (10 and 30 September) are expected to address.
3. An idea that was raised, set aside, and is now back on the table
One data point in the Presidency note is worth isolating because its status has already changed once and may change again. In December 2025, Italy proposed capping the merchant service charge for low-value digital euro transactions initiated by small merchants at a flat fee of €0.02. Member States considered this and did not support including it in the Council mandate at that time. The idea appeared settled — in the negative.
It is not settled. The Presidency’s note records that Parliament’s own text now includes a broadly similar concept — proportionate treatment for micro-transactions — and that the Presidency “considers it appropriate at this point to seek Member State feedback on the concept again”. A proposal that Member States rejected nine months ago is, as of the 4 September working party meeting, back under active discussion because Parliament independently arrived at a comparable position. This is a useful illustration of how provisional “final” answers are at this stage of a trilogue, and a caution against treating any single Council or Parliament position as the eventual outcome.
4. The parallel the current agenda does not draw
The legal tender regulation — the third file in the same package — contains a structurally identical question for cash. Parliament’s draft compromise text, reported by MLex in March 2026, introduces a provision requiring Member States to compensate financial intermediaries for additional costs imposed by measures that ensure adequate cash access — for instance, where an operator is required to maintain an ATM or a deposit point in a location the market would not otherwise sustain commercially. As with the digital euro’s offline-compensation gap, this provision has no equivalent in the Council’s December 2025 mandate. It is a Parliament proposal, not agreed policy, and its outcome in trilogue is genuinely open.
The parallel is precise, not loose. In both cases, the Council’s agreed starting position funds the infrastructure that supports the dominant, connected, revenue-generating form of payment — card-based acceptance in the case of the IFR-capped merchant fee model that predates this package, and online digital euro transactions in the case of the EA-uniform cap — while leaving unfunded the infrastructure that supports the harder-to-monetise, resilience-oriented use case: offline digital euro transactions on one side, physical cash access points in thin markets on the other. In both cases, it is Parliament, not the Council, that has proposed a compensation mechanism to close the gap. In both cases, whether that mechanism survives trilogue is unresolved as of this note.
There is a legal precedent that both proposals implicitly draw on, whether or not their drafters intended it. The EU’s Universal Service Directive in electronic communications (Directive 2002/22/EC, now consolidated into Directive 2018/1972) established that where a Member State requires an operator to provide a service at a net cost that represents an unfair burden, a compensation mechanism — funded publicly or through a sector levy — may be introduced, provided the net cost is calculated transparently. The Court of Justice confirmed the transparency requirement in Commission v France (C-146/00, 2001). That precedent supports the principle behind both the offline-transaction and the cash-infrastructure compensation proposals; it does not resolve whether co-legislators will choose to apply it to either, or to both, or to neither.
5. What today’s trilogue and the following weeks could settle
Per the Presidency’s own agenda, the second political trilogue on 10 September is expected to address the digital euro compensation and distribution model, and the exceptions to mandatory cash acceptance together with the vulnerable-groups question in Article 8. A further Council preparatory working party is scheduled for 21 September, ahead of a third political trilogue on 30 September. Whether the offline-compensation gap and the cash-infrastructure compensation clause are resolved in the same direction, in opposite directions, or left open into a fourth round is not yet knowable, and this note does not predict it.
| For clarity: nothing in Sections 2, 3 or 4 above should be read as describing agreed EU law. The only settled elements as of 10 September 2026 are the Council’s December 2025 mandate (EA-uniform merchant fee cap for the digital euro; no offline compensation within that mandate) and the AMLR’s €10,000 cash threshold, which is separate legislation already adopted and due to apply from July 2027. Everything else discussed here — the four Parliament proposals on digital euro fees, the Italian flat-fee idea, and the cash-infrastructure compensation clause — is a live negotiating position, not current policy. |
Sources
1. Council of the European Union, Presidency discussion note in advance of the second political Single Currency Package Trilogue, WK 13232/2026 INIT, 31 August 2026 (LIMITE). Working Party on Financial Services and the Banking Union, meeting of 4 September 2026.
2. Council of the European Union, press release, 19 December 2025: Council mandate on the Single Currency Package (digital euro, legal tender of cash, non-euro area PSP provision).
3. European Parliament, negotiating mandate on the digital euro, adopted 9 July 2026. First political trilogue held 13 July 2026; interinstitutional technical meetings 14 July and week of 31 August 2026.
4. MLex, ‘Digital euro fees, cash legal tender addressed in new EU Parliament compromise’, 9 March 2026. Parliament’s compensation clause for cash-access infrastructure costs.
5. Regulation (EU) 2024/1624 of 31 May 2024 (AMLR), Art. 80: €10,000 EU-wide cash transaction ceiling, applicable from 10 July 2027; Member States may set lower thresholds.
6. Directive 2002/22/EC (Universal Service Directive), Arts. 12–13, consolidated into Directive 2018/1972/EU (European Electronic Communications Code), Art. 89: net cost calculation and financing of universal service obligations.
7. Court of Justice of the European Union, Commission v France, C-146/00, 6 December 2001: transparency requirement for universal service net-cost compensation.