Czech Republic and the euro
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The
Czech Republic The Czech Republic, or simply Czechia, is a landlocked country in Central Europe. Historically known as Bohemia, it is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to the southeast. The ...
is bound to adopt the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
in the future and to join the
eurozone The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender, and have thus fully implemented EMU policies ...
once it has satisfied the
euro convergence criteria The euro convergence criteria (also known as the Maastricht criteria) are the criteria which European Union member states are required to meet to enter the third stage of the Economic and Monetary Union (EMU) and adopt the euro as their currenc ...
by the Treaty of Accession since it joined the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
(EU) in 2004. The Czech Republic is therefore a candidate for the
enlargement of the eurozone The enlargement of the eurozone is an ongoing process within the European Union (EU). All member states of the European Union, except Denmark which negotiated an opt-out from the provisions, are obliged to adopt the euro as their sole currency ...
and it uses the
Czech koruna The koruna, or crown, (sign: Kč; code: CZK, cs, koruna česká) has been the currency of the Czech Republic since 1993. The koruna is one of the European Union's 9 currencies, and the Czech Republic is legally bound to adopt the euro currenc ...
as its
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...
, regulated by the
Czech National Bank The Czech National Bank, ( cs, Česká národní banka, ČNB) is the central bank and financial market supervisor in the Czech Republic, headquartered in Prague. It is and a member of the European System of Central Banks. It was established on ...
, a member of the
European System of Central Banks The European System of Central Banks (ESCB) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability t ...
, and does not participate in European Exchange Rate Mechanism II (ERM II). Although the Czech Republic is economically well positioned to adopt the euro, following the
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis that took place in the European Union (EU) from 2009 until the mid to late 2010s. Several eurozone membe ...
there has been considerable opposition among the public to the adoption of the euro currency. , there is no target date by the government for joining the ERM II or adopting the euro. The cabinet that was formed following the 2017 legislative election does not officially plan to proceed with euro adoption within its term. The non-adoption policy was continued by the succeeding cabinet formed after the 2021 election.Přijetí eura se na čtyři roky odkládá. Podle vznikající vlády by to "nebylo výhodné"
Published on 2 November 2021.


History


European Union accession and 2000s

The European Union membership referendum in 2003 approved the country's accession with 77.3% in favour, and in 2004 the Czech Republic joined the EU. Since joining the EU in May 2004, the Czech Republic has adopted fiscal and monetary policies that aim to align its macroeconomic conditions with the rest of the European Union. Initially, the Czech Republic planned to adopt the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
as its official currency in 2010, however evaluations in 2006 found this date to be unlikely and the target date was postponed indefinitely. In February 2007, the Finance Minister said 2012 was a "realistic" date, but by November 2007 this was said to be too soon. In August 2008, an assessment said that adoption was not expected before 2015 due to political reluctance on the subject. However, in October 2009, the then Finance Minister,
Eduard Janota Eduard Janota (13 March 1952 – 20 May 2011) was a Czech economist and politician who served as the Minister of Finance A finance minister is an executive or cabinet position in charge of one or more of government finances, economic polic ...
, stated that 2015 was no longer realistic. In June 2008, the Central bank governor
Zdeněk Tůma Zdeněk Tůma (born 19 October 1960) is a Czech economist, who was the Governor of the Czech National Bank from 1 December 2000 to 30 June 2010. He had previously served as Vice Governor of the Bank from 13 February 1999 to 30 November 2000. Care ...
speculated about 2019. In late 2010 a discussion arose within the Czech government, partially initiated by then President
Václav Klaus Václav Klaus (; born 19 June 1941) is a Czech economist and politician who served as the second president of the Czech Republic from 2003 to 2013. From July 1992 until the dissolution of Czechoslovakia in January 1993, he served as the secon ...
, a well known
eurosceptic Euroscepticism, also spelled as Euroskepticism or EU-scepticism, is a political position involving criticism of the European Union (EU) and European integration. It ranges from those who oppose some EU institutions and policies, and seek reform ...
, over negotiating an opt-out from joining the eurozone. Czech Prime Minister
Petr Nečas Petr Nečas (; born 19 November 1964) is a Czech former politician who served as the prime minister of the Czech Republic and leader of the Civic Democratic Party from 2010 to 2013, and as Member of the Chamber of Deputies (MP) from 1993 to 2013 ...
later stated that no opt-out was required because the Czech Republic could not be forced to join the ERM II and thus could decide if or when to fulfil one of the necessary criteria to join the eurozone, an approach similar to the one taken by
Sweden Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic country located on ...
. Nečas also stated that his cabinet would not decide upon joining the euro during its term.


2010s

The
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis that took place in the European Union (EU) from 2009 until the mid to late 2010s. Several eurozone membe ...
further decreased the Czech Republic's interest in joining the eurozone. Nečas said that since the conditions governing the eurozone had significantly changed since their accession treaty was ratified, he believed that Czechs should be able to decide by a
referendum A referendum (plural: referendums or less commonly referenda) is a direct vote by the electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a representative. This may result in the adoption of a ...
whether to join the eurozone under the new terms. One of the government's junior coalition parties,
TOP09 TOP 09 (name derived from cs, Tradice Odpovědnost Prosperita, lit=Tradition Responsibility Prosperity) is a liberal-conservative political party in the Czech Republic, led by Markéta Pekarová Adamová. TOP 09 holds 14 seats in the Chamber o ...
, was opposed to a euro referendum. In April 2013, the Czech Ministry of Finance stated in its Convergence Programme delivered to the European Commission that the country had not yet set a target date for euro adoption and would not apply for ERM II membership in 2013. Their goal was to limit their time as an ERM II member, prior to acceding to the eurozone, to as brief a period as possible. On 29 May 2013 Miroslav Singer, the
Governor A governor is an administrative leader and head of a polity or political region, ranking under the head of state and in some cases, such as governors-general, as the head of state's official representative. Depending on the type of political ...
of the
Czech National Bank The Czech National Bank, ( cs, Česká národní banka, ČNB) is the central bank and financial market supervisor in the Czech Republic, headquartered in Prague. It is and a member of the European System of Central Banks. It was established on ...
(the Czech Republic's
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
) stated that in his professional opinion the Czech Republic will not adopt the euro before 2019. In December 2013, the Czech government approved a recommendation from the
Czech National Bank The Czech National Bank, ( cs, Česká národní banka, ČNB) is the central bank and financial market supervisor in the Czech Republic, headquartered in Prague. It is and a member of the European System of Central Banks. It was established on ...
and Ministry of Finance against setting a formal target date for euro adoption or joining ERM II in 2014.
Miloš Zeman Miloš Zeman (; born 28 September 1944) is a Czech politician serving as the third and current President of the Czech Republic since 2013. He previously served as the Prime Minister of the Czech Republic from 1998 to 2002. As leader of the Czec ...
, who was
elected Elected may refer to: * "Elected" (song), by Alice Cooper, 1973 * ''Elected'' (EP), by Ayreon, 2008 *The Elected, an American indie rock band See also *Election An election is a formal group decision-making process by which a population ...
President of the Czech Republic The president of the Czech Republic is the head of state of the Czech Republic and the commander-in-chief of the Armed Forces of the Czech Republic. The president mostly has ceremonial powers as the day-to-day business of the executive governm ...
in early 2013, supports euro adoption by the Czech Republic, though he also advocates a referendum on the decision. Shortly after taking office in March 2013, Zeman suggested that the Czech Republic would not be ready for the switch for at least five years. Prime Minister
Bohuslav Sobotka Bohuslav Sobotka (; born 23 October 1971) is a Czech politician and lawyer who served as the Prime Minister of the Czech Republic from January 2014 to December 2017 and Leader of the Czech Social Democratic Party (ČSSD) from 2010 until his resig ...
, from the Social Democrats, stated on 25 April 2013, prior to his party's election victory that October, that he was "convinced that the government that will be formed after next year's election should set the euro entry date" and that "1 January 2020 could be a date to look at". Shortly after being sworn into the new Cabinet in January 2014, Czech Foreign Minister Lubomír Zaorálek stated that the country should join the eurozone as soon as possible. The opposition
TOP 09 TOP 09 (name derived from cs, Tradice Odpovědnost Prosperita, lit=Tradition Responsibility Prosperity) is a liberal-conservative political party in the Czech Republic, led by Markéta Pekarová Adamová. TOP 09 holds 14 seats in the Chamber of ...
had also run on a platform in the 2013 parliamentary election, that called for the Czech Republic to adopt the euro between 2018 and 2020. In line with this, the governor of the
Czech National Bank The Czech National Bank, ( cs, Česká národní banka, ČNB) is the central bank and financial market supervisor in the Czech Republic, headquartered in Prague. It is and a member of the European System of Central Banks. It was established on ...
, having an advisory role towards the government about the timing of euro adoption, described 2019 as the earliest possible euro entry date. In April 2014, the Czech Ministry of Finance clarified in its Convergence Programme delivered to the European Commission, that the country had not yet set a target date for euro adoption and would not apply for ERM-II membership in 2014. Their goal was to limit their time as an ERM-II member, prior to acceding to the eurozone, to as brief a period as possible. Moreover, it was the opinion of the previous government that: "the fiscal problems of the eurozone, together with continued difficulty to predict the development of the monetary union, do not create a favorable environment for the future adoption of the euro." Zeman stated in June 2014 that he hoped his country would adopt the euro as soon as 2017, arguing that adoption would be beneficial for the Czech economy overall. The opposition ODS party responded by running a campaign for Czechs to sign an anti-euro petition, handed over to the Czech Senate in November 2014, but viewed by political commentators as not having any impact on changing the government's policy to adopt the euro in the medium-term without holding a referendum on it. In December 2014, the Czech government approved a joint recommendation from the Czech National Bank and Ministry of Finance, against setting a formal target date for euro adoption or joining ERM-II during the course of 2015. In March 2015, the ruling
Czech Social Democratic Party The Czech Social Democratic Party ( cs, Česká strana sociálně demokratická, ČSSD, ) is a social-democratic political party in the Czech Republic. Sitting on the centre-left of the political spectrum and holding pro-European views, it is a m ...
adopted a policy of striving to gather political support to adopt the euro by 2020. In April 2015, the
coalition government A coalition government is a form of government in which political parties cooperate to form a government. The usual reason for such an arrangement is that no single party has achieved an absolute majority after an election, an atypical outcome in ...
announced it had agreed to not set a euro adoption target and not to enter ERM-2 until after the next legislative election scheduled for 2017, making it unlikely that the Czech Republic will adopt the euro before 2020. In addition, the coalition government agreed that if it wins re-election it would set a deadline of 2020 to agree on a specific euro adoption roadmap. In June 2015, finance minister
Andrej Babiš Andrej Babiš (; born 2 September 1954) is a Czech politician and businessman of Slovak descent who served as the Prime Minister of the Czech Republic from 2017 to 2021. Babis previously served as the Minister of Finance and deputy Prime Minister ...
suggested a nonbinding public referendum on euro adoption. The Andrej Babiš' Cabinet that was formed following the 2017 legislative election does not plan to proceed with euro adoption within its term.Jaroslav Bukovský
Vstoupit do eurozóny? Až bude euro za dvacet korun, shodli se Babiš s Rusnokem
Published on 5 December 2017.


2020s

Petr Fiala Petr Fiala (; born 1 September 1964) is a Czech politician and political scientist who has been the Prime Minister of the Czech Republic since November 2021 and leader of the Civic Democratic Party (ODS) since 2014. He previously served as the ...
's
cabinet Cabinet or The Cabinet may refer to: Furniture * Cabinetry, a box-shaped piece of furniture with doors and/or drawers * Display cabinet, a piece of furniture with one or more transparent glass sheets or transparent polycarbonate sheets * Filing ...
that emerged from the 2021 legislative election does not intend to adopt euro within its term either, calling the adoption "disadvantageous" for the Czech Republic.


Euro use

Selected
chain store A chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many pa ...
s in the Czech Republic accept payments in euro cash, and return change in
Czech koruna The koruna, or crown, (sign: Kč; code: CZK, cs, koruna česká) has been the currency of the Czech Republic since 1993. The koruna is one of the European Union's 9 currencies, and the Czech Republic is legally bound to adopt the euro currenc ...
.


Opinion polls

The following are polls on the question whether the Czech Republic should abolish the koruna and adopt the euro currency.


Eurobarometer chart

;Public support for the euro in the Czech Republic by each Eurobarometer survey


Adoption status

The 1992
Maastricht Treaty The Treaty on European Union, commonly known as the Maastricht Treaty, is the foundation treaty of the European Union (EU). Concluded in 1992 between the then-twelve member states of the European Communities, it announced "a new stage in the ...
originally required that all members of the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
join the euro once certain economic criteria are met. The Czech Republic meets two of the five conditions for joining the euro ; their inflation rate, not being a member of the European exchange rate mechanism, and the incompatibility of its domestic legislation are the conditions not met.


Notes


References

{{Euro topics
Euro coins There are eight euro coin denominations, ranging from one cent to two euros (the euro is divided into a hundred cents). The coins first came into use in 2002. They have a common reverse, portraying a map of Europe, but each country in the eurozone ...
Euro by country
Euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...