20th January 2014

Politics: PM: Euro to be adopted in 2020

The Prime Minister Jiří Rusnok announced his conviction of adopting the common European currency by the end of the year 2020. He made such conviction not only as the PM (nearly terminated, though), but also as a candidate to the Bank Board of the Czech National Bank; the President Miloš Zeman announced his intention to appoint him to the Bank Board in March, 2014).

The PM listed a few arguments in favor of the adoption of the Euro. Firstly, he reminded the pro-export base of the Czech economy. The exporters support the Euro adoption for a longer time as the common currency may stabilize the foreign demand on Czech products. Secondly, the PM also cast doubts on sovereignty and currency strength of the Czech currency CZK as shown during the recent CNB intervention against the CZK.

There are several conditions that should be passed by the Czech Republic. First of all, political will for such step is needed. The PM predicts that next pre-electoral campaign in 2017 may revolve around the Euro adoption in 2020. Secondly, the Bank Board of the CNB should side with the Euro. Last but not least, there are some legal conditions concerning the stability of the Czech public finance in fulfilling the Maastricht Convergence Criteria (the public debt on GDP ratio).

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Members of the American Chamber of Commerce in the Czech Republic