Prague, Czech Republic – The Ministry of Finance and the Czech National Bank will once more recommend to the government not to set any date for the adoption of the euro, according to the Czech News Agency (CTK).
The recommendation from the country’s two main financial and monetary institutions comes ahead of a Monday meeting during which the government is set to examine if the Czech Republic fulfills the so-called “Maastricht convergence criteria” and whether it should set a date to join the monetary union.
The government of Prime Minister Andrej Babis (ANO) had already indicated that it was not planning to adopt the euro as the Czech national currency during the current mandate.
Both the Finance Ministry and Czech National Bank had also previously recommended not to set an adoption date.
According to EU treaties, all member states (except for Denmark and previously the UK, who negotiated an opt-out clause) are legally required to join the euro once they meet the convergence criteria: price stability, soundness and sustainability of public finances, exchange rate stability through participation to the Exchange Rate Mechanism (ERM II) for at least two years and long-term interest rates.
However, it remains up to national governments to set a date or choose to indefinitely postpone the ratification and adoption process of joining the union.
According to current figures, and partly due to impact of the COVID-induced economic crisis, the Czech Republic would only meet the last criterion this year, and report one of the highest inflation rates in the EU and a budget deficit of around 6% of GDP (three percentage points higher than EU requirements).
With popular support for the euro among the lowest in Europe, according to the latest Eurobarometers, successive Czech governments over the past few years have all refrained from expressing their support to join the Euro-zone.
Among Visegrad Group countries, Slovakia is the only one to have adopted the euro, in 2009.
For more on the Czech Republic’s complex relationship with the EU’s common currency, you can read our insight piece on the topic.