Joining Eurozone

The Czech Social Democratic Party (Česká strana sociálně demokratická, ČSSD) is generally in support of the Czech adoption of the EU common currency. Why? The main argument for adoption presented by the ČSSD is that it is in the economic interest of the Czech Republic to do so – above all because the Czech economy is heavily dependent (even more so than many other Euro zone states) on the economic cycle of Germany, a core Eurozone country.


The party exercises more caution in talking about the timing of accession to the Eurozone, however: first, at the European level, it is important to address all issues of the Eurozone that have been exposed by the recent economic and financial crisis (such as the responsibility for debt), as well as the necessity to create a banking union first, ČSSD maintains. While the Czech Social Democratic Party acted as a supporter of the Eurozone, as well as the Czech accession to it even during the peak of the recent economic and financial crisis, Jan Mládek, who has in the meantime become the Minister of Industry and Trade of the Czech Republic, did not omit pointing out that the Czech Republic should not be paying for “mistakes that occurred prior to our [envisioned] accession to the Eurozone.” More specifically, it estimates that in approximately five years, it could become an issue to be seriously considered, with 2019-2021 being the possible date for accession to the Eurozone. Moreover, with regard to the domestic level, ČSSD stresses that without a wide support for the Euro across the political spectrum, as well as consensus among experts and the business community and, above all, the central bank, the adoption of the Euro will not materialize. A look at the 2013 election manifesto of the party shows that this topic is mentioned only once and in relation to the timing of this step: “We will prepare the Czech Republic for its accession to the Eurozone. We want to enter when it is economically and socially advantageous for our country to do so.” Importantly, ČSSD treats the decision regarding the timing of the Czech entry into the Eurozone as a sovereign decision of the Czech government. Bohuslav Sobotka, the party's leader has said that “the issue of the timing of our adoption of the Euro is an issue which will be decided in a sovereign manner by the Czech Republic - our government, our citizens, our parliament.”

In any case, considering the Czech Socialist Party is the leading political party advocating European integration and the Czech Republic's active role in the European Union, one may legitimately ask whether this topic might not deserve more attention in the 33-page-long document. Half a year later, the 2014 European Parliament election manifesto stresses the importance of a “more stringent regulation of the banking sector, a crucial step in preventing the repetition of the crisis, which was brought about by the greedy financial speculators.” It is interesting to note that the Euro is not explicitly mentioned – contrary to the practice of many other political parties during the campaign (which however use rather the rejection of the Euro in the campaign). This is likely related to the fact that ČSSD generally frames the issue of the adoption of the Euro as something that the Czech Republic has agreed to in principle, a decision which was affirmed by the accession referendum, which has been used by the Bohuslav Sobotka, who has in the meantime become the Prime Minister, as a legitimating argument: “I'd like to stress that this committment [to adopt the Euro] is one to which we agreed upon our accession to the EU. The Accession Treaty was the only one to have been affirmed in a referendum, meaning that the majority of Czech citizens have agreed to the adoption of this treaty, including the committment to adopt the common European currency in the future. ... In my opinion it would be very unfortunate to open a discussion on altering the Accession Treaty and leaving out this committment. Firstly, it would be a negative message to the Eurozone as such ... as this message could undermine the stability of the whole Eurozone; it would also make the Czech Republic the subject of legitimate criticism by important members of the EU. Secondly, it would present a negative message about the Czech Republic itself; someone might ask why we don't want to adopt the Euro and whether it means that we don't want to commit ourselves to decreasing public deficits in the future, as well as to fiscal discipline which is a natural part of being a Eurozone member.”


The Civic Democratic Party (Občanská demokratická strana, ODS), on the other hand, is one of the main opponents of Euro on the Czech political spectrum. This party also asserts that the adoption or non-adoption of Euro should be understood primarily in terms of the Czech national interest. Contrary to the ČSSD, however, it maintains that it would be economically advantageous for the Czech Republic to refrain from adopting the common European currency.

The Civic Democratic Party has strong views about how the direction outlined by them should be followed. While it recognizes that the adoption of the Euro has been agreed to by the Czech citizens in a referendum (as part of the Accession Treaty), it asserts that conditions have changed since then – particularly with regard to the Euro and the recent Eurozone crisis, which is why it wants to negotiate an exception for the Czech Republic, in order for it to be keep its national currency, the Czech crown. In any case, the decision should be subject to a referendum: “I am convinced that the reasonable solution is to hold a referendum about Czech accession to the Eurozone as soon as possible. At this moment, I would not under any circumstances reccomend our accession to the Eurozone,” said the MEP Evžen Tošenovský. Similarly to the ČSSD, ODS seeks to legitimize its step: it holds that when citizens agreed to the adoption of the Euro as part of the Accession Treaty, they agreed to something that has since then changed fundamentally and hence, a new referendum needs to take place.

The main argument, however, is likely one relating to how the party perceives the European Union and the integration process in general. Jan Zahradil, who is now the party's leader for the 2014 elections to the European Parliament and perhaps the most visible politician representing the ODS with regard to the EU, has argued that a fiscal union (and a common tax policy), which the party opposes, is a further step in EU's federalization. Fiscal autonomy is asserted to be a crucial element of state sovereignty, which ODS maintains the Czech Republic should guard more carefully. In light of this information quite understandably, ODS was also an opponent of the Pact for the Euro, which the Czech Republic rejected. Moreover, having a control over a state's currency is an important instrument for dealing with economic turmoil and should be therefore kept in the hands of the state. Banking union is also out of the question for the Civic Democratic Party, at least until Czech Republic will have adopted the Euro.

Other arguments cited by the 2014 European Parliament election manifesto include the concern that the adoption of the Euro would lead to inflation and would devalue citizens' savings. Moreover, “due to the current crisis of the common European currency, the adoption of the Euro would for the Czech Republic mean providing the amount of 350 billion CZK to the fund designated to solve the problems of governments that manage their economies in an irresponsible manner.”

Bearing this in mind, it must be noted that the former Prime Minister, Petr Nečas, represented a deviation from the opinion prevailing in the ODS in this regard. He perceived the Czech adoption of the Euro as a Czech commitment to the other EU member states; an attempt to obtain an exception to the Accession Treaty would present an unneccessary political cost: “I don't see any reason to send an absolutely false and redundant political signal as well as to pay unnecessary political costs, because any potential withdrawal from the Eurozone has to be confirmed by all the other member states. It would damage both the Czech Republic and the Eurozone,” he said on the topic.