Euro adoption

On joining the EU, the Czech Republic undertook to adopt the single European currency – the euro. The main principles of euro adoption are described in The Czech Republic’s Euro-area Accession Strategy (pdf, 47 kB). In line with this strategy, the Government and the CNB regularly assess whether the Czech Republic is ready for euro adoption. The conclusions of this assessment are summarised in the Assessment of the Fulfilment of the Maastricht Convergence Criteria and the Degree of Economic Alignment of the Czech Republic with the Euro Area. In this context, the CNB performs detailed analyses once a year, which it publishes in the Analyses of the Czech Republic’s Current Economic Alignment with the Euro Area.

Alignment Analyses and Assessment

In addition to the traditional analyses, Alignment Analyses 2024 (pdf, 2.3 MB) have been supplemented with six thematic chapters. The first of these examines the current institutional developments in the euro area and the European Union. The second thematic chapter provides an overview of assessments of the Czech economy by renowned international institutions. The third chapter focuses on the euroisation of the Czech economy (primarily with regard to bank loans), while the fourth compares net exports in EU countries during the crisis years. The fifth chapter explains what joining ERM II means for a country and the requirements for meeting the Maastricht exchange rate stability criterion. The final thematic chapter focuses on the banking union and the implications of the Czech Republic’s potential integration in the union.

Further update of the joint Assessment document is to be submitted to the Czech Government by the end of March 2025. In the Assessment (pdf, 1,3 MB) document prepared in December 2023, the Ministry of Finance and the CNB recommended that the Czech government should not set a target date for euro area entry for the time being. In 2023, the Czech Republic was compliant with only two of the four required Maastricht convergence criteria. No substantial progress has been made as regards the Czech Republic’s economic preparedness for euro adoption, and thus the unfinished process of economic convergence remains a factor arguing against early euro adoption. Czech public finance sustainability also remains unresolved. By contrast, the high degree of openness of the Czech economy and its close trade and ownership links with the euro area are arguments for adopting the euro. The institutions and rules of the euro area have changed over recent years, and discussions on further deepening integration are still ongoing. The future potential financial and non-financial commitments relating to the Czech Republic’s entry into the euro area thus cannot be reliably estimated at the moment. Further update of the Assessment document is to be submitted to the Czech Government by the end of March 2025.