5 Years in the EU: Current Issues of Adopting Euro in the Czech Republic

The aim of this paper is to evaluate the fulfillment of Maastricht Convergence Criteria by the Czech Republic for 5 past years of being member of the EU. The Czech Republic hasn’t set the official term of adoption of euro yet and even hasn’t been participating in the exchange rate mechanism ERM II which is the basic assumption for adopting of euro. The Czech Republic is characterized by lower inflation rate during its high economic performance which can be explained by appreciation of Czech crown to euro. The sore point for the Czech Republic is the unsolved condition of Czech public financial sector. The total debt is relatively low but the contemporary world financial crisis has revealed poor adjustment adaptability in times of economic turmoil. Anticipated deficits for following years could lead to lower ratings and hence to expensive debt funding. It isn’t possible to adopt euro in near future without necessary reforms of financial sector.