The Czech government has decided not to set a date for the introduction of the euro for the time being, based on an assessment of the fulfilment of the Maastricht convergence criteria and the economic adjustment to the euro area. This decision takes into account the current economic challenges and the need for further adjustments.
The Czech government has taken note of the joint recommendation of the Ministry of Finance and the Czech National Bank not to set a date for the introduction of the euro for the time being. The recommendation is based on the “Assessment of the fulfilment of the Maastricht convergence criteria and the economic adjustment of the Czech Republic to the euro area.”
The assessment is divided into three areas. The first area examines the fulfilment of the Maastricht convergence criteria, which are a prerequisite for joining the euro area. These criteria are designed to minimise the risks and costs associated with the absence of an independent monetary policy. The Czech Republic met the interest rate and public finance criteria in 2024. The price stability criterion was not met, due to the low value of the criterion and the continued rise in costs within the domestic economy. The exchange rate fluctuation criterion is also not met, as the Czech Republic does not participate in ERM II.
In the second area, the economic readiness to adopt the euro is assessed. A key element is the harmonisation of economic developments in the Czech Republic and the eurozone, as well as the ability to absorb economic shocks following the loss of monetary policy independence. No significant progress has been made here since 2023. One obstacle is the still incomplete economic convergence, particularly in terms of price and wage levels. The differences in the economic structure compared to the eurozone could also cause problems. Other risks include unresolved structural problems and the long-term challenges for public finances (ageing population, infrastructure investments). Planned major projects, such as the construction of high-speed railway lines or nuclear power plants, could place a heavy burden on public budgets. The economic and financial challenges should therefore be resolved before joining the monetary union.
The Czech economy’s high degree of openness and strong integration with the eurozone are positive factors. Some labour market indicators, such as the low long-term unemployment rate, and the resilience of the banking sector, are also favourable.
The final area concerns the euro area itself. The economic heterogeneity of the eurozone and the impact of the energy crisis highlight the challenges of monetary union. The harmonisation of national economies is an essential prerequisite for the smooth functioning of the euro. The budgetary situation of many euro countries is also problematic.
The institutions and rules of the eurozone have changed in recent years, and negotiations on deeper integration are ongoing. Therefore, it is currently not possible to reliably estimate the future financial and non-financial liabilities of the Czech Republic within the euro area.
