The Czech government has endorsed a constitutional amendment that would prevent any future adoption of the euro unless it wins a three-fifths parliamentary majority, and would enshrine the Czech crown as the national currency in the constitution.

Prime Minister Andrej Babis's populist government, supported by right-wing and far-right parties, has pledged not to take steps towards joining the single-currency zone while in office. The amendment would go further, raising the political bar for any later government that wanted to change course.

The Czech Republic is one of six European Union states still outside the euro, and it has no firm date for adoption, despite having committed in principle to joining when it entered the EU in 2004. Successive governments have kept the question on hold.

A hurdle the government itself may not clear

The proposal faces an immediate difficulty: constitutional change itself needs a three-fifths majority, and the governing parties do not hold one alone. Opposition support would be needed, and that is uncertain.

Foreign Minister Petr Macinka, of the right-wing Motorists party, argued that joining the euro would be a fundamental step requiring a strong mandate. The Industry Confederation objected, favouring adoption and noting that about 65% of Czech exports go to the eurozone.

The contrast with Hungary is striking. Under new Prime Minister Peter Magyar, Budapest has put euro adoption high on its agenda, reversing the sceptical line of its predecessor. Prague, for now, is moving in the opposite direction: seeking to lock the crown into law rather than prepare to give it up.

Source: Reuters