Czech President Petr Pavel called for euro currency adoption in his first New Year’s speech to the nation.

“It is about time that after years we begin to make concrete steps which will lead us to fulfilment of this obligation,” Pavel said in a traditional presidential address to the nation from Prague Castle.

Czechia entered the EU nearly 20 years ago, in May 2004, committing to euro adoption. Several cabinets have since then confirmed the country’s intention to adopt the euro, but none has taken concrete steps leading to a specific timeframe.  

“Despite the never-ending discussions about advantages and disadvantages of euro for a country with an open and export [oriented] economy, lying in the centre of Europe, a common currency is the logical future”, Pavel continued.

The current five-party-coalition, led by Petr Fiala of the neoliberal ODS, has ruled out adopting the euro during its tenure which is poised to end in the autumn of 2025, and neither did it set a timeframe for euro adoption. In its programme, however, the cabinet declares its intention to fulfil the Maastricht criteria for euro adoption as soon as possible.  

Adoption of the euro has long been resisted by the central bank as well as Eurosceptic politicians, who claim that the country needs to converge further with the EU and that premature adoption would deprive the monetary authorities of the tools to calibrate the country's economic performance. 

Critics such as Pavel point out that the country has already virtually converged – GDP per capita on a purchasing power basis was 91% of the EU average in 2022 – and that Czech business was deeply integrated with the EU and would benefit from sharing the euro: some 80% of Czech exports go to the EU, with around a third of all exports going to Germany alone. Some large exporters, such as VW-owned carmaker Skoda Auto, already take advantage of the ability to file tax returns in euros.

In November, the more centrist parties in the coalition – the Mayors and Independents and the Pirate Party – criticised the Ministry of Finance, led by Fiala’s party colleague Zbynek Stanjura, for not recommending the joining of the eurozone in connection with the analysis submitted to the cabinet.

“From the above analysis, it follows that the Czech economy is ready to adopt the euro and that risks [of such move] are rather low,” Czech business Hospodarske Noviny (HN), which had access to the document, quoted the comments made to the report by the Ministry of Interior, led by Mayors leader Vit Rakusan.

In his speech, Pavel also criticised Fiala’s cabinet for bad communication. “The cabinet is failing to explain its measures and reform steps”, Pavel said, but also praised the cabinet for maintaining unity inside the five-party coalition, which ranges from the socially liberal Pirates to the rightwing ODS.

Pavel also addressed the tragic shooting at the Charles University’s Philosophic Faculty in the Prague city centre, which claimed lives of fourteen at the hands of a shooter, who was later identified by police as committing three more murders just before the December 21 shooting spree.   

He reiterated the shock with which the Czech capital is still coping, saying that “we thought that we live in complete safety and that what is happening in the world does not concern us”.

Pavel came short of joining calls for stricter gun regulation in the country, which has some of the most lenient gun possession laws in Europe, saying that “we can improve legislation, controls and [other] measures, but we cannot give up freedom because of fear”.