Nov 24, 2023

Czech Conservatives Block Euro Adoption Despite Country’s Readiness

The Finance Ministry, which is in the hands of the Civic Democratic Party (ODS, ECR), and the National Bank, believes Czechia should meet the main criteria to adopt the euro next year, but they do not recommend any steps to advance towards the Eurozone.

The Finance Ministry, the report’s co-author, is in the hands of the Civic Democratic Party, which is often sceptical towards further EU integration and does not support the EU’s single currency.

Despite the progress, the report explicitly says that the government should “not set a target date for joining the euro area” and “should not even seek entry into the exchange rate mechanism (ERM II)”.

The report is not yet publicly available but has been seen by Hospodářské noviny.

Several ministers from the five-party coalition government are now challenging the draft resolution formulated in this way in the inter-ministerial proceedings. They are bothered that the finance ministry says one thing and recommends another.

“The analysis presented shows that the Czech economy is ready to adopt the euro and the risks (of such a move) are rather low,” the Interior Ministry led by Vít Rakušan (STAN) said during the proceedings.

Other ministers agree with the criticism – particularly Regional Development Minister Ivan Bartoš (Pirates/Greens/EFA), Research and Innovation Minister Helena Langšádlová (TOP 09, EPP).

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While STAN, TOP 09, KDU-ČSL, and the Pirates are openly in favour of adopting the euro, conservative ODS remains the only party against it.

Businesses are also pushing for the adoption of the EU currency, as the economy is geared towards exports to other EU countries, and the exchange rates are unfavourable for companies.

According to Hospodářské noviny, the Finance Ministry has rejected most of the objections.

The report needs to be approved and will likely be voted on among government ministers in December.

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