The Czech Republic has made significant progress toward meeting the criteria for adopting the euro, with its budget deficit shrinking more than expected last year.
According to recent statistics, the deficit dropped from 3.8% to 2.2% of GDP, marking a key step toward the adoption of the single European currency. However, despite this progress, the parliamentary parties holding the majority remain opposed to adopting the euro in the upcoming term.
On January 6, Prime Minister Petr Fiala (ODS) and Finance Minister Zbyněk Stanjura (ODS) revealed the state budget deficit for the previous year amounted to CZK 271.4 billion. In contrast, the total deficit across all public finances, including municipal, regional, and other government budgets, was CZK 177 billion, CZK 94 billion lower than expected.
This reduction is largely attributed to the positive performance of local governments. As a result, the state budget deficit fell below 3% of GDP for the first time since 2019, bringing the Czech Republic in line with the criteria for adopting the euro—excluding the need for currency alignment with the eurozone. Despite this, the current Czech government remains resistant to adopting the euro. While some groups, including mayors and parties like KDU-ČSL and TOP 09, support the move, the ODS party firmly opposes it. A recent survey conducted by iRozhlas revealed that fewer than a quarter of Czech citizens are in favor of adopting the euro, while almost three-quarters are against it.
“If this number does not rise above 50 percent, I think it is unrealistic. However, what is important is that due to our economic situation, the debates have become truly serious and realistic,” said Finance Minister Zbyněk Stanjura.
Meanwhile, proponents of the euro argue that its adoption could bring tangible benefits. “In our opinion, the economic benefits were proven more than ten years ago when Slovakia, for example, switched to the euro,” said Miloš Nový (TOP 09), Deputy Chair of the Parliamentary Budget Committee.
“Let’s adopt the euro, it will make trade with other countries easier, reduce transaction costs. In the context of recent events, I think many citizens realize that greater European integration should take place,” said Josef Bernard (STAN), Chair of the Budget Committee of the Chamber of Deputies.
On the other hand, opposition groups remain skeptical of the euro’s adoption. “For the ANO movement, adopting the euro in the next election period is not an issue. The Czech Republic would lose a key economic tool — monetary policy — and would become part of the guarantees for weaker EU countries,” said Deputy Speaker of the Chamber of Deputies Karel Havlíček (ANO).
“In case of economic crises, we can use our own monetary policy. But if the euro is here, we will depend on what the European Central Bank says,” said Radim Fiala, Chair of the SPD Parliamentary Club.
In November of the previous year, the Cabinet received an analysis from the Government’s National Economic Council (NERV), which identified several advantages of switching to the euro, including cheaper and more accessible financing for investments.
