Interventions against crown slow CR's entry in euro zone - Zeman


18.02.2014 13:35

Prague - Czech President Milos Zeman expressed today in a speech in the Chamber of Deputies his strong dissatisfaction with interventions made by the central bank against the crown last year, saying they slowed down the Czech Republic's entry in the euro zone.


Prezident Miloš Zeman vystoupil s projevem před poslanci 18. února v Poslanecké sněmovně v Praze. ČTK Doležal Michal

Zeman addressed the lawmakers ahead of a vote of confidence in the new coalition cabinet of Prime Minister Bohuslav Sobotka.

"I would like to express my strong dissatisfaction with the Czech National Bank's interventions which artificially pushed the rate beyond its real market value and slowed down our entry in the euro zone, be it an intention or not," Zeman said.

Zeman already expressed disagreement with the interventions in November last year after the central bank launched them.

The CNB weakened the crown versus the euro by about 7 percent in an effort to avert the danger of a consumer price fall. The measure was followed by criticism.

CNB governor Miroslav Singer has recently made several statements in which he said the latest data on the development of inflation confirm that interventions were a correct step to take.

In his speech Zeman also welcomed a part of the new government's policy statement which describes the creation of conditions for euro zone entry. He also agrees with the section in which the cabinet proposes that the Czech Republic joins the so-called fiscal pact.

As regards the compliance with the Maastricht criteria for euro adoption, there is nothing standing in the Czech Republic's way to start the preparatory work leading towards the adoption of the single currency, Zeman said.

Besides, nothing is preventing the country from advancing towards the two-year transitional period during which the crown's rate would be fixed versus the euro in a narrow band, Zeman added.

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