The Government has approved the joint recommendation of the Ministry of Finance of the Czech Republic and the Czech National Bank not to set a target date for adopting the euro in the Czech Republic yet. The decision is based on information contained in this year’s “Assessment of the Fulfilment of the Maastricht Convergence Criteria and the Degree of Economic Alignment of the Czech Republic with the Euro Area”. The Government has been assessing this document on the Czech Republic’s preparedness for adopting the euro every year since the country joined the European Union in 2004.
Resolution and supervisory mechanisms have been introduced or bolstered in the European Union in response to issues relating to the European debt crisis. Macroeconomic and budgetary surveillance has been tightened. New European institutions have been and still are being created. These changes are fundamentally changing the conditions and obligations arising from the Czech Republic’s potential membership of the euro area. Sustainable fulfilment of the Maastricht convergence criteria accompanied by sufficient alignment of the Czech economy with the euro area economy is no longer a sufficient condition for adopting the single currency. It can be expected that euro area entry will in reality also be conditional on participation in the new institutions and mechanisms. Based on the current information, the costs relating to joining the European Stability Mechanism would be particularly substantial upon the Czech Republic’s entry into the euro area.
The preparedness of the Czech Republic itself to adopt the euro has improved in recent years.
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5th March 2019