The Czech government expects to decide when to join the Euro in the autumn
of this year, after hearing a Central Bank recommendation on what steps to
take in the run-up to membership in the currency zone. The timing of euro
entry is important for the Czech Republic's budget and monetary policies
and for investors who have bet billions on rising asset prices and falling
interest rates ahead of the country's adoption of the single currency. Out
of all central European candidate countries for EU membership, the Czech
Republic has been most hesitant on setting a definite date. Hungary and
Slovakia target 2008, while Poland hopes to adopt the euro by the
beginning of 2009 at the latest. Czech Finance Minister Bohuslav Sobotka,
has said 2010 was a realistic date, adding that a decision would be based
on a joint proposal prepared by the Czech Central Bank and the ministries
of Finance and Industry and Trade. The Czech Central Bank (CNB) has
recommended the Czech Republic stay out of the EU's exchange rate
mechanism for some time after EU entry next May, warning of the risks
involved in linking the freely floating crown too closely to the euro.