Agence France-Presse
20 May 2009, 17:32 CET
(PRAGUE) - The interim Czech cabinet appointed to lead the country to early elections in October will not set a euro adoption date, Prime Minister Jan Fischer said on Wednesday.
"I declare that this cabinet has no ambition to announce the date the country will join the euro," Fischer, whose non-partisan cabinet took the helm on May 8, told AFP in an interview.
"It will be a decision that will be in the hands of the next political government," added Fischer, whose team replaced the centre-right cabinet of Mirek Topolanek, which was toppled midway through the Czech EU presidency in March.
Topolanek's government, which came to power in 2007, put off a decision on a euro adoption date despite pressure from exporters hit by the strong koruna currency.
Topolanek said earlier he would announce the euro entry date on November 1 this year, while his finance minister, Miroslav Kalousek, said he hoped the country would join the euro by 2014.
But Fischer said the Czech Republic was unlikely to meet the euro adoption criteria next year as the global economic crisis will drive its public deficit well above the limit set at 3.0 percent of gross domestic product (GDP).
"If the economic forecasts for 2010 are valid ... the deficit will reach five percent of GDP, and we must look at euro adoption with this in mind," he added.
Fischer's cabinet expects a record-high budget deficit of 150 billion koruna (5.6 billion euros, 7.7 billion dollars) for 2010, almost four times more than the gap planned for this year.
The estimate is based on the finance ministry's forecast of 0.8 percent GDP growth for 2010, following an expected 2.3 percent contraction this year.
In the first quarter of the year, Czech GDP contracted by 3.4 percent on an annual basis.
Czech National Bank vice-governor Mojmir Hampl said in a newspaper interview on Wednesday it did not make sense to think about setting the date if the country failed the criteria.
"When it comes to timing, I think a small economy trying to catch up with the big ones should join the euro only after it has done most of the catching up," he told the Hospodarske noviny daily.
