EXPLAINED: Why Czechia's euro adoption uproar is dividing the government

The surprise decision Monday of Czech Minister of European Affairs Martin Dvořák to appoint an adviser for the country adopting the euro has provoked intense debate and criticism from both inside and outside the government coalition. 

In response, Prime Minister Petr Fiala – hesitant about Czechia adopting the common currency – has called a special, so-called government conciliation procedure to discuss the issue. Where does Czechia currently stand in its potential adoption of the euro, and what effects is it having on the ruling coalition?

Dvořák’s decision to appoint a representative for euro adoption, he says, stems from the fact that the coalition has not yet found common ground on whether Czechia should adopt the single currency. Petr Zahradník, the new adviser, will steer the debate on euro adoption and prioritize it in Czech political discourse. 

Czechia’s European Affairs minister is part of the Mayors and Independents (STAN) coalition party, which has consistently been a backer of Czechia joining the euro.

The Civic Democrats (ODS) party, which Fiala leads, is currently skeptical about near-term euro adoption; its approach is lukewarm at best and unenthusiastic at worst. It’s safe to say it has not reacted well to Dvořák’s moves and is now seeking to rectify the situation. 

Fiala’s procedure will assess “the need to maintain a common coalition position on key political topics,” according to cabinet spokesperson Lucie Ješátková. It will also, ominously, discuss “competencies,” Ješátková says.

Fiala and the ODS believe it is too early to adopt the euro due to the Czech economy’s currently shaky public finances. He has repeatedly said that Czechia is “not ready.” 

In contrast, President Petr Pavel announced his support for the single currency earlier this year.

In an interview with Czech Television this morning, ODS member of parliament Jan Skopeček accused Dvořák of playing an “intra-coalition game.” In his view, Dvořák’s interests in the euro are limited, and his actions Monday stem from STAN’s wish to boost its image ahead of the European elections, which take place in June this year.

Chamber of Deputies Speaker Markéta Pekarová Adamová of the TOP 09 party similarly criticized Dvořák’s move. She said Monday that Czechia’s path towards the euro “is not to have an adviser to one minister, but a government commissioner.” 

Notably, TOP 09 is open to euro adoption and has previously called for the government to open talks about the single currency. 

The Christian Democrats (KDU-ČSL) party has thus far kept quiet on the matter. However, last summer Labor Minister Marian Jurečka of the KDU-ČSL promoted the idea of Czechia adopting the euro by the end of the decade, despite admitting the inevitable challenges of this.

The Pirates party is the strongest euro backer out of all coalition parties. It has made no official statements on Monday afternoon’s developments yet.

The opposition ANO movement – currently performing strongly in opinion polls – has capitalized on the government discord. ANO says that Fiala is “losing control” of the government and is at risk of appearing “ridiculous.” ANO has flip-flopped on the euro adoption; its most recent stance is hesitancy. 

Opposition Freedom and Direct Democracy party leader Tomio Okamura said Monday that the parties of the ruling coalition want to “push through the euro in the Czech Republic at any cost and destroy the country.”