Czech Republic and the euro

The Czech Republic has been a member of the European Union since May 2004. Its currency, the Czech koruna, is not currently participating in ERM II.

Adopting the euro

Initially, the Czech Republic planned to adopt the euro as its official currency in 2010, however evaluations in 2006 found this date to be unlikely.[1] In February 2007, the Finance Minister said 2012 was a "realistic" date.[2] but by November 2007 this date was said to be too soon.[3] In August 2008, an assessment said that adoption was not expected before 2015 due to political reluctance on the subject.[4] However, in October 2009, the finance minister of the time, Eduard Janota, stated that the 2015 target is no longer realistic.[5] Central bank governor Zdeněk Tůma even speculated about 2019. [6]

Currently, a competition for the design of the national sides of Czech euro coins is under consideration, and as such the design has not been decided.

In late 2010, a discussion arose within the Czech government about negotiating an opt-out from joining the Eurozone. This discussion was partially initiated by Euro-sceptic President Václav Klaus. Prime Minister Petr Nečas later stated that no opt-out is needed because the country cannot be forced to join the ERM II mechanism. As a result, it will itself decide when or if to fulfill one of the obligatory criteria to join the Eurozone, which is an approach very similar to that of Sweden. Nečas also stated that his cabinet will not decide upon joining the euro during its term which is due to expire in 2014. The Czech Republic therefore will not be able to become a member of the Eurozone sooner than 2017.[7][8] During the European sovereign debt crisis Nečas said that the conditions governing the euro had changed sufficiently that Czechs should be consulted by referendum before joining the eurozone.[9]

A survey held in January 2011 found only 22% (6% "definitely yes", 16% "rather yes") of the population being in favor of adopting euro while 78% (43% "definitely not", 35% "rather not") being against it.[10]

Status

The Maastricht Treaty originally required that all members of the European Union join the euro once certain economic criteria are met. Czech Republic meets 3 out of the 5 criteria.

Convergence criteria
Inflation rate 1 Government finances ERM II membership Long-term interest rate 2
annual government deficit to GDP gross government debt to GDP
Reference value 3 max 1.0% max 3% max 60% min 2 years max 6.0%
 Czech Republic 0.3% 5.2% 4 35.4% Not yet a member 4.7%
  criteria fulfilled
  criterion not fulfilled

1 No more than 1.5% higher than the 3 best-performing EU member states.
2 No more than 2% higher than the 3 best-performing EU member states.
3 Values from May 2010 convergence report of the European Central Bank, to be updated at least every two years.
4 Negative value is a surplus.

References

  1. ^ (Czech) Topolánek a Tůma: euro v roce 2010 v ČR nebude, 2006-09-19
  2. ^ (Czech) Euro je v Česku reálné v roce 2012, míní MF — Adoption of euro in Czechia is realistic in 2012, says the Ministry of Finance, 2007-02-21
  3. ^ (Czech) Prime Minister says: we won't adopt Euro in 2012 either — 18.11.2007
  4. ^ "Euros in the wallets of the Slovaks, but who will be next?" (Press release). Sparkasse.at. 2008-08-05. https://www.sparkasse.at/sPortal/sportal.portal;jsessionid=qhHSJ0FRvFSBNdNpZkKJVhvhHLJD4v1T2d1BG3Gcyj82vJYTDKm3!76983841?_nfpb=true&_windowLabel=LABEL_MAIN&_urlType=action&LABEL_MAIN_sh=181fe8bb390eeff395532e7956f3e368&LABEL_MAIN_action=content.main&LABEL_MAIN_OVERRULEREFRESHBACK=true&LABEL_MAIN_event=changeMain&LABEL_MAIN_chronicleId=%2Febgroup_en_0196%2FChannels%2FPress%2F2008%2F2.QU%2Feb_pi_en_20080508_next_main_Images.akp&LABEL_MAIN_zz=41235.36447435065&LABEL_MAIN_pc=1&_pageLabel=GRID02&cci=09002ee2805dab70&desk=ebgroup_en_0196&navigationId=012130649753268001119092&. Retrieved 2008-12-21. 
  5. ^ Czech euro adoption in 2014 or 2015 not realistic -- Janota
  6. ^ For Czechs, euro adoption still a long way off, Czech Radio, 2008-06-09
  7. ^ "Czech crown to stay long with no euro opt-out needed: PM". Reuters. 2010-12-05. http://www.reuters.com/article/idUSTRE6B411620101205. 
  8. ^ http://www.bloomberg.com/news/2010-12-05/czech-republic-still-able-to-opt-out-of-adopting-euro-prime-minister-says.html
  9. ^ Pop, Valentina (28 October 2011). "Czech PM mulls euro referendum". EUObserver. http://euobserver.com/843/114118. Retrieved 28 October 2011. ""The conditions under which the Czech citizens decided in a referendum in 2003 on the country's accession to the EU and on its commitment to adopt the single currency, euro, have changed. That is why the ODS will demand that a possible accession to the single currency and the entry into the European stabilisation mechanism be decided on by Czech citizens," the ODS resolution says." 
  10. ^ "Zavedení eura v ČR" (in Czech) (Press release). Středisko empirických výzkumů. 2011-01-31. http://stem.cz/clanek/2114. Retrieved 2011-06-28.