Abstract
The Czech economy is ready to adopt the euro. The reasons for the postponement of the euro adoption process are merely political. People are skeptical when it comes to the euro (also in the light of the existing debt crisis in the euro area); consequently, political institutions do not promote the euro introduction. Concerns thus remain. We can expect analogical development in the Czech Republic as that of Slovakia or Slovenia, as these economies are similar. Actual inflation did not increase in either of the two countries; however, the perceived inflation was quite high. The prospect of the euro introduction depends on how to avoid worries about inflationary implications of the introduction of the euro. The communication and information campaign should focus on eliminating the concerns about the euro introduction.
Highlights
Upon entering the European Union, each new Member State automatically commits to replace its national currency with the euro
Act on the Czech National Bank (CNB) that governs activities of the CNB following the euro introduction in the Czech Republic; it was vetoed by President Klaus on 3 June 2010;
In a Eurobarometer survey of April 2015 conducted in seven Member States that have yet to adopt the euro (Bulgaria, Czech Republic, Hungary, Poland, Romania, Croatia, and Sweden), 7022 respondents were given the following questions: What impact, if any, will the euro introduction have on the price level? The structure of their answers is graphically shown in Table no. 4
Summary
Upon entering the European Union, each new Member State automatically commits to replace its national currency with the euro. The objective of this paper is to assess the economic and institutional preparedness for the euro introduction in the Czech Republic and specify the reasons this step has been postponed. The part assesses the preparedness of the Czech economy for the euro introduction, using the nominal and the real convergence criteria to the euro area. This is followed by an evaluation of the euro adoption perspective. In order to fulfil our objectives, we have used statistical data analyses (comparison of economic data for the Czech Republic and for the euro area), opinion poll results (Eurobarometer), and comparison of the development of the actual inflation and the perceived inflation for the Czech, Slovak, and Slovenian economy
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