The Czech Republic’s Ministry of Finance and the Czech National Bank published a joint assessment of Maastricht convergence and the country’s economic alignment with the euro area, and recommended that the government does not set a target date for euro area entry for the time being. The Czech government approved the document. On the Maastricht criteria, the Czech Republic did not meet the price stability criterion in 2024, despite inflation fluctuating within the tolerance band around the Czech National Bank’s target, because uneven price growth across the European Union resulted in a low reference value. It met the long-term interest rate criterion in 2024, and it probably met the government financial position criterion for 2024 in both the deficit and debt components, while remaining formally non-compliant with the exchange rate stability criterion because it does not participate in the exchange rate mechanism. For 2025, the assessment expects the Czech Republic will probably fulfil the reference values for price stability, interest rates and the government financial position. The assessment points to strong trade and ownership links with the euro area, high business cycle alignment and a robust banking sector as factors reducing risks, but flags ongoing real convergence gaps (price and wage levels), structural differences in the economy, and long-term fiscal sustainability and structural deficit challenges, including limited fiscal space and future pressures linked to population ageing and large investment projects. The Ministry of Finance and the Czech National Bank also recommend that any decision to set a target date should be taken at the beginning of an electoral cycle to allow time for the necessary economic and legislative measures, stable communication with the public and business sector, and coordination with European institutions.

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