In recent days, ministries have reportedly been arguing about whether the government should start taking steps to adopt the common European currency. The reason for this is said to be the report on the Czech Republic's economic alignment with the eurozone, which is being prepared by an expert group of representatives of the Ministry of Finance (MoF) and the Czech National Bank (CNB). The report objectively states that the Czech Republic will probably meet some of the so-called Maastricht criteria for the introduction of the euro next year. These criteria are a necessary condition for a country to apply to join the euro area. In the sense of: You are allowed to apply for a driving licence when you reach the age of 18 and pass your driving test. Not in the sense of: As soon as you turn 18, it is advisable to apply for a licence as soon as possible. At the same time, the MoF and CNB report - also objectively - recommends not taking any steps in this direction, i.e. not applying for membership of the eurozone.
However, STAN ministers opposed the document. Specifically, the Interior Ministry, led by Vít Rakusan (STAN), submitted this comment: "The analysis presented shows that the Czech economy is ready to adopt the euro and the risks (of such a move) are rather low. (...) In light of the analysis presented, the recommendation not to join the eurozone sounds incomprehensible."
The fact that the economists' recommendation not to adopt the euro seems incomprehensible to the Ministry of the Interior could perhaps be explained by the fact that the Ministry's expertise in policing monetary policy is not very high. In that case, however, it seems somewhat incomprehensible to me why the Home Office has a desire to comment on the monetary problem.
If, on the other hand, Rakusan's ministry understands the content of the report and the monetary issue, then I have to say that it is not true that the recommendation of the economists from the Ministry of Finance and the CNB not to adopt the euro is incomprehensible. On the contrary, I was personally present at the round table meeting in the Senate on the subject of whether or not to adopt the euro, and the economists from the Ministry of Finance, the CNB and the University of Economics (VŠE) communicated their opinions in a very understandable, professionally correct and completely factual and non-ideological manner, which I fully subscribed to. The adoption of the euro would lead to higher inflation, slower GDP growth, lower competitiveness, and higher debt. Or it would damage the Czech economy.
The Deputy Minister for European Affairs was also present at the round table. This representative listened to the expert analysis of the economists present about the damage to the Czech economy and expressed his opinion (roughly) on the basis of their analysis in the sense that the adoption of the euro is not currently essential, he understands the arguments and there is no reason to push for its adoption. And lo and behold, now the Minister for European Affairs, Martin Dvořák (STAN), claims that this recommendation of the economists is not supported in any way and proposes that the government, in its resolution, call on the Ministry of Finance and the CNB to take steps to join ERM II in 2025.
It should also be added here that public opinion is overwhelmingly against the adoption of the euro.
Facts, science, economic prosperity, and the will of the people are all taking a beating.
Of course, it is quite typical that the relevant ministries, which are pushing for the adoption of the euro and reject the analysis of the economists from the CNB and the Ministry of Finance, do not even attempt to contradict the report or argue against it - they just demand a deadline for the adoption of the euro without explanation and call the report's conclusion allegedly "incomprehensible".
Markéta Šichtařová
Next Finance s.r.o.
nextfinance.cz
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