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LN: Czechs should shun euro until start of euro zone reform

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Prague, Sept 14 (CTK) – The Czechs should wait for how the planned euro zone reform will look like before deciding on their own adoption of the euro, Jan Machacek writes in daily Lidove noviny (LN) on Thursday in reaction to EC head Jean-Claude Juncker’s promotion of the euro in his EP speech this week.

In his report on the state of the EU, Juncker reminded the EU countries standing outside the euro zone that the only state with an opt-out for staying outside is Denmark. If everybody were in the euro zone, the countries that use the euro would not have to create their own budget and a new club inside the EU, Machacek writes.

Juncker’s appeal could be expected. After all, as early as in May, proposals leaked from the EC for the euro to become obligatory for all and for steps to be taken to make its adoption attractive for the hesitating countries, Machacek writes.

It is known that the EC’s visions often end softened or restricted by influential EU members, but Juncker’s promotion of the euro enjoys support from both Germany and France. The two countries have been urging the Czechs to join the euro zone for a long time, Machacek writes.

On the other hand, everybody knows that the euro zone will start reforming soon, but there is no consensus on the transformation. France would like to introduce a common budget, and also a finance ministry and minister of the euro zone, and possibly also its financial government and a joint unemployment insurance fund, Machacek writes.

Furthermore, the completion of the banking union project, the introduction of common bonds and common insurance of accounts have also been spoken about, he writes.

The Germans, on their part, would only like to reinforce the European Stability Mechanism (ESM) and transform it into a European monetary fund, which, however, should be used only in case of big crises or speculative attacks, Machacek writes.

The EC’s position usually oscillates in the middle between the ambitious demands of France and the minimalist concessions of Germany, Machacek writes.

He says the euro has not been criticised by right-wingers only, and that its “inborn defects” have also been criticised by leftist economists such as Joseph Stiglitz and Paul Krugman.

The planned reform, or medical treatment, may be a success or a failure. For the time being, the Czechs have no clue about how the euro zone will be reformed. They only know that a reform is inevitable. It is therefore logical for them to wait for what will start happening, Machacek writes.

As for the accommodating steps Juncker proposed to make the euro adoption more attractive for the Czechs, and other countries outside the euro zone, it would be logical to promise that these countries would not join the saving of Greece or Italian banks, and will contribute to the joint budget only if their money is used as a buffer against possible future crises, not to remedy the [foreign] failures and mistakes that are not their fault at all, Machacek writes.

Without such a promise, the euro could hardly be acceptable to the voters in the Czech Republic, where a manual worker still earns a sum corresponding to an old-age pension in Greece.

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