Czechia still not ready to move towards euro adoption
At a conference marking the 20th anniversary of Czech membership in the EU, the country’s top officials highlighted the numerous advantages of belonging to the alliance. One thing they were unable to agree on was the prospect of euro adoption.
While Czechia’s former sister state Slovakia adopted the euro in 2009, Czechs have been reluctant to relinquish their national currency: the crown. Past references to the country’s commitment to adopt the euro were made in a hazy manner, as something that was in the pipeline at some point in the future.
At the start of this year, the subject was raised by President Petr Pavel, who urged the government to act on this matter. On the 20th anniversary of Czech EU membership and with European elections looming, it was inevitable that the country’s top politicians should make their stand on this issue known and it revealed that, all in all, only two of the smaller parties in government are in favour of setting a time frame for euro adoption.
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. Jan Skopeček is the party’s economic expert.
“When this coalition government was formed it was clearly stated that this government would not decide on euro adoption during its term in office. I think our smaller coalition partners should respect that agreement. And, as to the president, it would be good if he explained why this government should move to adopt the euro when the majority of Czechs are clearly against it.”
The Civic Democrats argue that there is no point in entering the ERM system before reaching 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.
According to economists, Czechia should meet most of the Maastricht criteria by the end of this year making euro adoption, by and large, a political decision. However, with 70 percent of Czechs opposed to it, it is unlikely that the ruling coalition will make a move in this direction.
