Milestones on the Road to Adopting the Euro in the Czech Republic

February 2014: The new Czech government declared an active support for creating conditions for euro adoption

Three political parties that formed the coalition government based on the general elections in October 2013 announced in their Policy Statement an active effort to create conditions conducive to the adoption of the euro. The Government also expressed its intention to sign the Fiscal Compact (the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) and to defend its interests in the emerging banking union, including preparations for accession.

July 2010: The new Czech government decided not to fix the date for euro adoption

Three political parties that formed the coalition government based on the general elections in May 2010 declared in their coalition agreement that for now they will not fix the date for euro adoption in the Czech Republic. They are, however, prepared to initiate the adoption under the assumption that the single currency will be developing as a sustainable project and the compliance with agreed rules will be ensured by the Eurozone countries.

April 2008: The Czech government confirmed the stance towards technical preparations in the absence of target date

By approving The Report on Fulfilment of the National Plan the Czech government backed the view of the National Coordination Group that there are a number of activities related to the future euro adoption that can be carried out in advance without knowing a target date for the Czech economy joining the Eurozone. Such activities are for the most part of a methodological nature, whose validity is permanent.

August 2007: The Czech government adopted Updated Euro Area Accession Strategy

The document gives reasons why the original unofficial term for euro adoption in the Czech Republic of 2009-2010 was abandoned. It summarizes both the benefits the Czech economy might derive from the single currency and the costs from entering the Euro Area. The updated strategy does not set a new tentative date for adopting the euro. It maintains that this date must be made conditional on resolving problematic areas of the Czech economy through reforming government budgets and strengthening the flexibility of labour markets.

April 2007: The Czech government adopted the National Euro Changeover Plan

The Czech government approved a document which highlights key changeover principles, outlines the timetable and addresses many other technical issues that define the process of euro adoption in the Czech Republic. It contains a summary of tasks in different segments of the Czech economy to be implemented for the sake of smooth transition towards the single currency. The Plan’s checklist is not anchored by a specific changeover date but is based on a not yet specified €-day.

October 2006: The Czech government chose the euro adoption scenario

The Czech government decided that the euro will be adopted under the so-called Big Bang scenario which consists in simultaneous changeover in cash and non-cash transactions. One of the arguments supporting this option was practical experience with the currency split of the Czechoslovak currency in February 1993.

November 2005: The Czech government decided on the institutional framework for technical preparations for euro adoption

Based on a government resolution, the National Coordination Group for the Euro Adoption in the Czech Republic was established. Also established was the position of the Chief Coordinator for the Euro Adoption in the Czech Republic. The Chief Coordinator presides the National Coordination Group, monitors the Group’s activities and communicates actively with the general public about the issues related to the euro.

May 2004: THE CZECH REPUBLIC BECAME A MEMBER OF THE EUROPEAN UNION

One of the obligations resulting from the Czech Republic’s membership in the European Union is the adoption of the single European currency. The economic and monetary policies aimed at fulfilling the Maastricht convergence criteria are closely tied to this objective.

October 2003: The Czech government adopted the Euro Changeover Strategy

The preparations for the Czech Republic’s accession to the European Union, which were successfully underway, gave the impetus for deliberations over the date of joining the Euro Area. For this purpose the Ministry of Finance and the Czech National Bank presented a joint document summarising the benefits and costs for the Czech economy that would result from becoming a member of the Economic and Monetary Union. This first Czech Republic’s Euro Area Accession Strategy indicated that depending on successful fiscal consolidation the period 2009-2010 could be considered a possible date for adopting the euro.