Czech finance minister rules out early entry into eurozone

The Czech Republic's finance minister has ruled out any plans for the country to adopt the euro until at least 2018, drawing a sharp dividing line between himself and the country's prime minister and president on the issue.

Andrej Babis, who is also deputy prime minister and leader of a ruling coalition party, dismissed support for eurozone entry among Prague's politicians, citing the high costs of adoption, the negative impact on exporters and the threat of a Greek default.

"I am not for it," said Mr Babis. "[The] euro is not really for the time being. We can discuss it, what is negative, what is positive, but [an adoption plan] will definitely not happen during this government."

Like its fellow central European countries, Poland and Hungary, the Czech Republic retained its own currency when it entered the EU in 2004 but is treaty-bound to join the eurozone at some point in the future.

Czech President Milos Zeman, an enthusiastic proponent of the single currency, has called a conference including Mr Babis, prime minister Bohuslav Sobotka and central bank president Miroslav Singer on May 31, in an attempt to spur efforts to join the euro.

"The president and my prime minister want this, but I am just watching what is going on . . . What will happen in the eurozone when Greece collapses?" he said. "Greece is bankrupt. Everybody knows. The question is where will be the default? On the IMF? On the ECB? On the people? On other banks?"

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The disagreement could further strain an already terse working relationship between Mr Babis and Mr Sobotka, who head the two major coalition partners in a government that is stable but riddled with mutual distrust. The next election is scheduled for late 2017.

Mr Sobotka, the career politician, and Mr Babis, the country's second richest man who had no political experience before he became finance minister in January 2014, make an odd couple. But they have managed to forge a working, if uneasy, relationship that has survived far longer than many political analysts expected after national elections.

Mr Sobotka, who relies on the continued support of Mr Babis and his ANO party to stay in power, has said he wants "the earliest possible target date" for adoption.

In neighbouring Poland, where public support for euro adoption is low, the country's presidential election has reignited debate over joining the single currency, which is not supported publicly by the current administration.

Mr Babis also said that the Czech Republic does not intend to contribute any funds to the so-called Juncker Plan, an EU investment fund backed by European Commission president Jean-Claude Juncker designed to plough funds into infrastructure projects.

"It makes no sense for us," said Mr Babis. "We don't have any problems. The Czech Republic is doing very well . . . We have money, but we are paralysed by bureaucracy."

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