Almost 70% of Czech company executives believe that a potential switch to the euro in the Czech Republic would have a positive impact on their business.
The call for the adoption of the euro is growing stronger in the business sector: in surveys from 2022 and 2023, 18% and 24% of company executives, respectively, considered the introduction of the euro as a desirable government measure. These are the findings of a survey of 190 company executives conducted by PwC. Only a tenth of the executives disagree, while 21% expect a neutral effect.
At the same time, their assessment of the Czech National Bank (CNB) as the body responsible for determining monetary policy has significantly improved compared to last year. Regarding interest rate regulation, 52% of directors view the CNB’s actions positively, while 39% have a favorable opinion of its currency interventions. “Czech business has long been a driving force in the euro debate, particularly among export-oriented companies, with the argument about reducing costs related to currency risk coverage.
Seven out of ten executives who are convinced that the euro will positively impact their companies send a very strong signal to the new government that will come after the autumn elections,” said Jan Brazda, a partner at PwC in the public sector.
According to him, the euro would provide an opportunity for greater integration in economic and security matters, which is a strong advantage in times of potential trade wars and the need to invest heavily in armaments. He also highlights the growing interest in the euro in the lending sector: more than half of the loans issued by Czech banks are already in euros, and this share is increasing. While 30% of executives evaluated the CNB’s actions positively last year, this year more than half of them do so. They are less satisfied with the CNB’s management of the exchange rate of the Czech koruna, but here too, the assessment has significantly improved, increasing from 28% to 39% compared to the previous year.
Several weeks ago, the government decided not to set a date for the introduction of the euro in the Czech Republic. This decision was made based on a joint recommendation from the Ministry of Finance and the CNB.
The Czech Republic committed to adopting the euro when it joined the European Union in 2004. However, the accession treaty did not specify when the country should join the eurozone. Of the ten countries that joined the EU in 2004, seven have adopted the euro, while Poland and Hungary remain outside the eurozone. Currently, 20 out of the 27 EU member states use the single European currency, with Croatia being the latest to adopt it in 2023.
