18th July 2017

Erste Group Research: Entry of Czech Republic into Euro Area

After the Czech National Bank ended its one-sided peg of the Czech koruna to the euro, the question of switching to the euro for good has re-emerged. However, few of the major domestic stakeholders seem to support the idea. Euro adoption thus seems unlikely, unless outside pressure rises significantly, Erste Group's analyst Michal Skořepa writes in his note.

In April of this year, the Czech National Bank ended its three-year onesided peg to the euro. This event induced both domestic and foreign observers of the Czech economy to ask more than they had previously about the likelihood that the country might move closer to adoption of the euro in the near future. This note aims to assess this likelihood on the basis of the views that various domestic stakeholders hold on this issue. 

The intensity of debate about the Czech Republic entering the Euro Area has been rising and falling over time, ever since the country entered the European Union and made the formal promise to strive toward euro entry. Overall, however, the interest of the general public in this topic has fallen and has been rather low for several years. One way to document this fading interest is the frequency with which euro adoption has been used as a search word in Google. ..Read full article in English here.



Members of the American Chamber of Commerce in the Czech Republic