Jan 30, 2024

President Petr Pavel Advocates Euro Adoption for Czech’s Export Economy

In an interview with Czech Radio on Monday, President Petr Pavel underscored the advantages of the Czech Republic adopting the euro, emphasizing its advantages for the country’s export economy and the opportunity to actively shape the future of the eurozone.

Pavel initiated discussions on euro adoption in the country during his New Year’s speech, calling for strategic steps to facilitate the transition.

While Finance Minister Zbynek Stanjura (ODS) currently dismisses the need for immediate consideration, Pavel argues that the Czech Republic’s strong export orientation aligns it closely with eurozone countries.

He suggests that actively participating in eurozone decisions, rather than passively accepting them, would be more beneficial for the nation.

President Pavel also highlighted the Czech Republic’s efforts to meet the Maastricht criteria this year, a prerequisite for joining the eurozone.

He proposed the establishment of a euro adoption officer within the government to demystify the euro debate, emphasizing the need for informed decision-making and long-term public education.

Pavel urged a careful examination of other countries’ experiences with euro adoption, dismissing fears of potential drawbacks and encouraging a more objective understanding of the fundamental political decision ahead.

Who’s in favour, who’s against

The Mayors and Independents and the Pirate Party, said they intend to push for the country to join the ERM exchange rate system next year and for that purpose they would like to see the government appoint a commissioner for euro adoption.

In the ERM system, the crown would be partially pegged to the euro and it is something that all applicants must undergo for a period of two years before the introduction of the common European currency. However, the Civic Democrats, the strongest party in government, have made it clear this will not happen during this government’s term in office.

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The Civic Democrats argue that there is no point in entering the ERM system before reaching an agreement on a euro adoption date and this is not the time to discuss the issue. They moreover point out that businesses in Czechia are free to use the euro in their business transactions.

The other two other ruling parties, TOP 09 and the Christian Democrats, say they are committed to adopting the euro, but not in this government’s term in office.

The opposition parties are also against euro adoption and are increasingly vocal on the subject as the European elections draw close. Alena Schillerová, former finance minister and deputy chair of the ANO party, said ANO would definitely go into the elections saying that they do not want the euro.

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