Advantages and Risks of Accession to Eurozone for the Czech Republic

Abstract

The article examines the benefits and risks of the euro adoption for the Czech Republic. In the last decade, in the light of structural problems of the economic and monetary union of the European Union and the Czech euroscepticism that has intensified against this background, the problem has become more of political nature and one of burning issues in relations between the Czech Republic and the EU. The paper analyzes the benefits and risks of such a decision. Special attention is paid to political factors – starting from the possible membership in the EMU institutions and ending with the potential overall improvement of relations with the leading countries of the EU. The authors conclude that from an economic point of view, the eurozone membership is beneficial for the Czech Republic if the level of labour productivity increases before the adoption. However, this issue presents the problem of the overall geopolitical orientation of the Czech Republic, which has to choose between striving to get into the «core» of the integration or the relentless defense of its national sovereignty within the European Union.

Keywords

• czech crown
• euro
• economic and monetary union
• eurozone
• czech national bank
• convergence