Page 4 - bne Magazine February 2023

4 I Companies & Markets bne February 2023
The Czech central bank has long opposed adoption of the euro, which would reduce its power and independence. / bne IntelliNews
Spontaneous euroisation of
the Czech economy undermines Eurosceptic prejudices
Albin Sybera
In 2022 Czech companies increasingly resorted to the euro in their business transactions, with the largest Czech company Skoda Auto switching its books to use the euro as of January 2023. The popularity of the euro was also on the rise among ordinary Czechs last year, Eurobarometer showed.
Investment banker Ondrej Jonas told a Czech Radio debate last week that pragmatically speaking Czechia already is a dual system in which many companies and residents operate in euros.
“Here you have part of the population which has dual [bank] accounts in [the Czech] koruna and in the euro. Transition to the euro is occurring naturally,” argued Jonas.
The difference between inflation in the eurozone of 9.2% and the national one of 16.2%, as well as the difference in interest rates between the ECB's 2% and the Czech National Bank's 7%, has reinforced the argument of the euro supporters that the country should adopt the euro because the export-oriented Czech economy is so dependent on the euro currency.
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The key interest rates %
Source: Bloomberg, Erste Group Research