The Czech government should not yet set a date for adopting the euro, according to a document submitted to the cabinet by the Finance Ministry and the Czech National Bank (ČNB). The Czech Republic will not meet any of the Maastricht criteria for joining the eurozone this year or next.
When the Czech Republic joined the European Union in 2004, one of the conditions was that it would adopt the euro. No firm deadline was set at that time, and there is no penalty for delays. It is up to each country to decide when it will join, and then embark on the process of meeting the euro convergence criteria, known as the Maastricht criteria.
“Although the specific date of entry is entirely up to each member state, it should ideally be based on its level of readiness.
In the material for the government, the Finance Ministry and the ČNB recommend that, given the current failure to meet the criteria, the Czech Republic should not set a deadline for the introduction of the euro and also not seek to join ERM II for the time being.
The government’s program statement does not make a commitment to set a deadline for adopting the euro by the end of its term in 2025. However, the document commits the cabinet to meeting the Maastricht criteria as soon as possible.
The issue has divided politicians and experts. The TOP 09 party, which is part of the government coalition, in July urged adopting the euro as soon as possible to boost the economy. Michal Skořepa, an economic analyst at Česká spořitelna, in June said that the Czech Republic’s independence from the eurozone may be a bonus in retaining foreign investor confidence.
An analysis in 2021 by the ČNB pointed out the pros and cons of euro adoption for the Czech Republic. It said a big benefit would come from the country’s strong trade links with other EU countries. Risks include the economic differences between the Czech Republic and the EU as a whole such as the unusually high proportion of industry in Czech national GDP.