The Euro for the Czech Republic

The Euro for the Czech Republic

One week ahead of election the Pandora Papers revealed the controversial eurosceptic and populist, Prime Minister of Czech Republic massive assets. The richest new EU Member State from the 8 post Communist Central Europeans who joined in 2004 is run by the richest politicians in Central Europe estimated net wealth by Forbes at 3,4 Billion $. Fine for him. But is it fine for the Czechs? Good, the Czech Republic is successful but Eurozone Slovakia, always much poorer is catching up. Eurozone Slovenia is considerable richer. Eurozone Lithuania is close and so is Estonia and soon possible Latvia. And let us not forget today Czech Republic as historically the richest part of Central Europe and the industrial core of the Austrian Hungarian Empire. Czechs are only half as rich as Austrian and Germans, clearly you can blame the communist division of Europe but we are now 32 years past the velvet revolution and the Prime Minister has 3,4 Billion $ assets according to Forbes ranking, no less. So what needs to be done to catch up to Germany and Austria? To make Czech rich, maybe not as rich as Babis but at least catch up?

The Euro as tool of convergence and cohesion

The Czech Republic has a central location in heart of Europe, low taxes, EU regulatory framework, inside the EU Internal Market, in Schengen, NATO, OECD everything is done, so what is wrong, why is Czech Republic stuck and make so little progress recently? No, Mr. Babis is not migration, no it is not German injustice, no, it is not the foreigners. No, it is the Euro. Nor better the lack of it. Economic integration, convergence to German and Austrian level and cohesion works much better inside one currency system. Sure, Czech Republic has massive regional disparities, hyper rich Prague and poorer periphery and a lock of EU style infrastructure but it is the Eurozone, which the proud Czechs reject to their own disadvantage. Misled by the richest European politician, Czechs are riled up in patriotic talk to their own economic disadvantages.

No the Euro is not a tool to subsides for southern Europe

The EU has just approved a 7 Billion Recovery package for Czech Republic and since EU accession close to 23 Billion net transfers have helped the Czech Republic and add the transfers for post communist reconstruction and for EU accession 1990 to 2004 so the Czechs certainly cannot complain in terms of EU generosity. And yes Southern Europe is a liability but no matter if Czech Republic is in Eurozone. Are all in EU together. It is not only Czech taxpayers unwilling for massive transfers to southern Europe. What makes you so different from German, Austria or Slovak or any other of the Eurozone taxpayers?

57% of Czech trade is with Eurozone today, so what next?

17% with non Eurozone EU, so what if Hungary and Poland join Eurozone? 74% of Czech trade is within EU. If now the Balkans and Ukraine adopt the Euro and all Europe uses the Euro will not most of Czech trade be with the Euro? 20% of internal Czech business transactions are done in Euro for simplicity reason. Support for the Euro has risen from 20% to 40% in the most Euro skeptic EU member state.

Is paper currency a question of national pride?

Czechs are proud for the money, so are Austrians, Germans, and French. So does pride depend on paper currency? Would Czech not be more happy and more proud at 50.000 $ GDP capita?

Czech debt is 40% of GDP

The Czech economy is 235 Billion $ more than Ukraine and the 6 Western Balkans together, half of what the 9 Million Austria with 430 Billion produce compare to the 10.5 Million at 235 Billion but why please can anybody say the Czech are not ready for Eurozone? If we want to have a global role for the Euro and we cannot convince the Czech Republic to join Eurozone why shall anybody in Asia, Africa and the America trust the Euro global role if the Czech do not?

Czech Republic, show leadership

Now with Croatia and Bulgaria joining Eurozone, member that joining later than Czech Republic in 2004, Bulgaria in 2007 and Croatia in 2013 the Eurozone is enlarging and the issue of the Euro as currency, as tool for integration is raised in the contested areas in Balkans and Eastern Europe. The Euro as currency from Ukraine, Georgia, Moldova, Serbia, Bosnia, Albania, and North Macedonia on same model as Montenegro and Kosovo is an option to bypass the resistance of Paris and others not keen for political enlargement. Many in Eastern Europe are hesitant to adopt the Euro as Poland, Czech Republic and Hungary reject the Euro. Is there something wrong if such successful countries reject the Euro? So we miss the opportunity to unite Europe by the Euro just because of Czech pride?

Hungary the Russian Trojan horse in Visegrad and EU and NATO

Viktor Orban has for all extent and purposes joined the Russian World. The former Freedom hero of 1989, former Liberal and former EPP has opted into the Russian energy orbit in 2014 with his nuclear power plant funded by RosAtom and his role in Russian gas transit. While staying officially in NATO he is opposing Ukraine in NATO, while accepting massive EU subsidies, he is mocking the Euro, our common currency as a failure. Why is the current leadership of Czech Republic following such policy? The Czech Republic just had a major crisis with Russia as result of the Russian secret service committing a terror act against a Czech arms factory supplying Ukraine in 2014. The resulting diplomatic spat a high stake drama with the Czech sending many Russian diplomats packing. The Czech Republic has allowed many Ukrainians to work legally with work permits in Czech Republic and is clearly pro Ukrainian in its foreign policy. Maybe less than Poland but certainly the Czech foreign policy is pro American and pro Ukraine so why are you endorsing Orban by staying outside the Eurozone?

Slovakia was always in history much poorer than Czech Republic and now?

Yes Slovakia is in the Eurozone and is catching up. Why do you think the Euro is so popular in Slovakia? They understand they are catching up fast with the big brother in Prague fast.  Do you want to be overtaken by Slovakia in terms of GDP/capita?

The Euro as our common destiny in EU

The Czech Republic was left to the Soviets on request of Stalin by consent of Roosevelt and Truman. Patton wanted to liberate Prague in 1945 but was stopped. The Soviet took all power in 1948 and killed Jan Masaryk. The Czechs were not allowed to accept Marshall funds. In 1968 the Soviet Union and her allies invaded Socialist Czechoslovakia and once freedom came in 1989 the Czech were invited to join NATO by 1999 and to EU in 2004 only 15 years after the end of Communist Europe, the Warsaw Pact and the victory of the Free World in the epic confrontation with the Soviet Union. The idea was to be united, fully as well in and by the common currency and as a political union of all Free Europeans. Today the Czechs behave as if we had press-ganged them into the EU and the Euro. It is not like that. The euro is a wonderful tool for our common European house, firm fundament of prosperity and tool of convergence, peace and unity. I belong to the generation celebrating the Euro in 2000 as the end of small state currencies and their limitations and constraints. I have no plan to excuse myself for that. I am very disappointed by the Czech standing aside as if not part of Europe, somewhere above the rest, smarter than we. But the EU itself lost confidence in our own institutions NATO, EU and Euro and is no longer recommending non-Members to join our great European peace framework. How come? Is something wrong? Why are the Council, Commission and Parliament and ECB President not calling and campaigning every single day for Eurozone enlargement? That is their task? If they do not care not lack trust were do they serve in that position? Time for better leadership for more unity, the basis for more prosperity and key to our ability to tackle the Russian, Chinese, Climate and all other possible challenges. Now in the post Corona recovery we need to make decisive progress on Eurozone enlargement to be ready when the next crisis strikes and she will. And anyhow the Eurozone as legal, moral and historic obligation for the Czechs and including the Czech is the legal, moral and historic obligation and it makes good economic sense for present and future Eurozone members to have the Czech consumers, taxpayers and citizens inside the Eurozone so let us get it done now in 2022.