Government to decide when to adopt single European currency in the autumn

21-07-2003

The Czech government expects to decide when to join the Euro in the autumn of this year, after hearing a Central Bank recommendation on what steps to take in the run-up to membership in the currency zone. The timing of euro entry is important for the Czech Republic's budget and monetary policies and for investors who have bet billions on rising asset prices and falling interest rates ahead of the country's adoption of the single currency. Out of all central European candidate countries for EU membership, the Czech Republic has been most hesitant on setting a definite date. Hungary and Slovakia target 2008, while Poland hopes to adopt the euro by the beginning of 2009 at the latest. Czech Finance Minister Bohuslav Sobotka, has said 2010 was a realistic date, adding that a decision would be based on a joint proposal prepared by the Czech Central Bank and the ministries of Finance and Industry and Trade. The Czech Central Bank (CNB) has recommended the Czech Republic stay out of the EU's exchange rate mechanism for some time after EU entry next May, warning of the risks involved in linking the freely floating crown too closely to the euro.