I've recently heard Legarde speak about stable coins in the EU and the need to advance CBDC and it was obvious she wants to control the money flow.
Stablecoins aren't exactly known to be privacy tools. Thus I interpreted this speech differently, that the ECB doesn't want the Euro to be replaced by USD stablecoins, or even worse, "basket"-type stablecoins like Libra was meant to be.
This is not meant to defend the ECB here, but it's two different problems imo. CBDC fear is a bit overrated (even if I don't like the concept), banks will always try to keep a portion of the digital transaction cake, so there will probably never be a "CBDC-only" system some people fear. Maybe in North Korea.
The question that should still be asked here is: Does a state want its citizens to be able to act as privately as possible (and thus possibly not controllable)?
It depends who is in charge in the state. And who demands certain "values" from the state (e.g. focusing more on security and not on privacy). See my
answer above to @pooya87 and
this one to Alpha Marine.
The problem has much to do with fears, people feel unsafe in the digital world and thus are demanding "strong leaders" and "strong law and order policies". And politicians give them what they want.
But the call for privacy is also weakened by the current tendency to form groups and defend every idiocy the own gang says. I'm referring here e.g. to left-leaning hackers who defend privacy but have too high hopes the state could protect their privacy, and reject "anarchist" methods like Bitcoin because it's not compliant with the group's ideology. Thus there are relatively few people defending Bitcoin's privacy. This thread is also a call to these groups, if someone of them is reading here (wishful thinking imo

).
If Bitcoin privacy had a strong movement protecting it, like those movements who have prevented the public connection storage in European countries like Germany, I think the state would not be acting as aggressively as it does currently. Both due to big voter groups demanding privacy, and perhaps even to more knowledge about the subject.
[...] democracy and freedom are illusions that politicians very skillfully sell us every four or five years when they need votes in elections. Let's be realistic, something like BTC is just a nuisance in the existing centralized system
I believe the problem lies deeper. See answers to @Lakai01 and @Alpha Marine
some posts above.
You have to wonder why most countries are afraid of this concept, especially those countries that have directly intervened to destroy the regimes of other countries and thus created a lot of enemies that they now have to be careful not to retaliate against. [...] In order to try to prevent this, they must have absolute control over everything
I don't fully understand your logic here. So they need control to prevent someone, in their name, retailiates against a stronger enemy? If you want you can elaborate a bit ...
Also imo currently the control can't be that absolute, otherwise there would be no crime at all and also no international conflict. There are cities in China where at least regarding crime in the public space, total control is close to reality (e.g. Shenzhen). In most other countries, the control is quite deep (see NSA) but not absolute.
(for some reason my browser refuses to quote your post correctly)