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Czech premier: adopting euro not realistic in 2012

Czech Prime Minister Mirek Topolanek said that the Czech Republic is not likely to adopt to the common European currency in 2012, reports said Monday.

Switching to the euro is “not realistic” within five years without first reforming country’s healthcare and pension systems, Topolanek was quoted as telling Czech Television over the weekend. Only those reforms would enable the Czech Republic to meet the so- called Maastricht currency stability criteria as soon as next year, a must for the country to enter the eurozone in 2012, the premier said speaking in a television debate. The center-right ruling coalition pushed through a set of economic measures this summer in order to bring the state’s sprawling budget deficit to below 3% of the GDP, one of the conditions for joining the euro club, as early as in 2008.

The European Commission has reprimanded the Czech Republic for its lax public finances, which already caused the country to give up its plan to enter the eurozone in 2010. While Czech Finance Minister Miroslav Kalousek said he would like to see the country adopting the euro in 2012, the cabinet has so far refrained from setting a new target. Business leaders would prefer to adopt the euro as soon as possible, but several Czech economists and the central bank have warned that the country is not ready for the step. Czech central bank board member Mojmir Hampl told the Hospodarske Noviny daily that a speedy adoption of the euro would spur inflation. (m&