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Ten Years of the Euro – Inspirations for the Czech Republic

Explore the impacts on Czech Republic post-10 years of the Euro through a conference at Central European University, Budapest, attended by Mr. Miroslav Kalousek. Delve into nominal exchange rates, interest rates, current accounts, and CDS in EU countries, old and new members alike. Gain insights on domestic credit, comparative price levels, GDP per capita convergence, and Maastricht criteria performance factors, such as inflation, interest rates, budget deficits, and government debt challenges.

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Ten Years of the Euro – Inspirations for the Czech Republic

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  1. Ten Years of the Euro – Inspirations for the Czech Republic György Szapáry Central European University,Budapest Conference hosted by Mr. Miroslav Kalousek, Minister of Finance of the Czech Republic, November 25, 2008

  2. Nominal exchange rates against the euro2 January – 14 November, 2008

  3. Three-month interbank offered interest rates2 January – 14 November, 2008

  4. Current Account and CDS in new EU member states

  5. Current Account and CDS in EU neighboring countries

  6. Current Account and CDS in old EU member states

  7. Domestic credit (% of GDP) 7

  8. Fast convergence in comparative price level as well (EA12=100) 8

  9. Current account balance / GDP in the NMS 9

  10. Fast convergence in GDP per capita at PPS(EA12=100) 10

  11. Performance under the Maastricht criteria

  12. Factors influencing the performance under the Maastricht criteria in the years ahead • Inflation: the recession will reduce the inflationary pressures, but this can be offset by depreciations of the exchange rate. • Interest rate: the reduced capital inflows may make it difficult to satisfy the 10-year interest rate criterion. • Budget deficit: little room for counter-cyclical expansionary fiscal policy, so meeting the deficit criterion should not represent a big problem, unless bank bailouts occur. • Government debt: Hungary’s debt is going to increase because of slow growth and borrowing under the IMF-EU-IBRD credit line.

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