Czech Minister of Labor advocates for euro adoption by 2030

Czechia may adopt the euro in the next seven years, according to Minister of Labor Marian Jurečka. In an exclusive interview with CNN Prima News, Jurečka said that between 2025 and 2030 Czechia may well be “headed for the eurozone.”

By the end of this decade, the minister says, Czechia will have met almost all of the Maastricht criteria (a set of rules a country must fulfill before adopting the euro).

"I think this is a real chance and a big challenge for the Czech economy and Czech society," Jurečka said of euro adoption. 

He said that he assumes 2029 or 2030 will see the country’s public budget in a good enough position to meet the Maastricht criteria. However, he added that the rules about inflation – it must be no more than 1.5 percentage points above the three lowest-inflation EU countries – are the responsibility of the Czech National Bank rather than the government.

According to Jurečka, it is highly unlikely that Czechia would join the eurozone under the current coalition parties. This is not only due to Czechia’s rocky public finances – inflation has only just returned to single digits after over a year at being over 10 percent – but also due to the hesitancy of the current government to make movements towards euro adoption.

Earlier this year, Prime Minister Petr Fiala said that Czechia is “currently not ready to join the euro,” adding that it is necessary to put the state budget in order and regulate the currently high inflation. At the end of 2022, Czechia registered a budget deficit of CZK 360 billion – its third-widest in history. This represented 3.6 percent of the country’s GDP.

According to the Maastricht criteria, this figure can not exceed 3 percent. The 2023 budget deficit is expected to be around the same (as a percentage of GDP), but in 2024 the state eyes a public deficit of 1.8 percent, financial services firm ING writes.

Total public debt is well over CZK 1 trillion. Maastricht criteria state that the government debt-to-GDP ratio must not exceed 60 percent – at present, Czechia’s ratio is at about 45 percent, although the government wants to lower this rate before adopting the single currency. Current interest rates are currently well over the 2-percent limit mandated by the European Central Bank to join the euro.

Czechs are generally not keen on joining the eurozone. An opinion poll released in May shows that just 18 percent of respondents are in favor of the country using the euro.

Presently shaky fundamentals within Czechia’s economy rule out near-term adoption, although Jurečka’s statements show that the government has seriously taken into account the prospect of euro adoption.