Economic impacts of euro adoption in the Czech Republic: An analysis of costs and benefits

The thesis examines the benefits and costs associated with the potential accession of the Czech Republic to the euro area and examines the current preparedness of the Czech economy for euro area membership. The theoretical part draws on the theory of optimum currency areas, convergence criteria, and the academic debate concerning the adoption of the euro by the Czech Republic. The empirical part analyses the Czech Republic’s compliance with the Maastricht convergence criteria, the degree of its real convergence towards the euro area, the economic homogeneity of the euro area, the monetary policies of the Czech National Bank and the European Central Bank, and the economic development of selected Member States following their accession to the euro area. The results show that in 2025, the Czech Republic meets three of the four Maastricht criteria, with participation in the ERM II mechanism remaining the only unmet criterion. At the same time, the Czech Republic is gradually converging towards the euro area in real economic terms, however, the degree of convergence achieved is not assessed as sufficient. The results also point to the persistent economic heterogeneity among euro area member countries and highlight the importance of an independent monetary policy for the Czech economy. The added value of the thesis lies in linking these areas and evaluating them jointly on the basis of up-to-date economic data. Based on the analyses conducted, the thesis concludes that, under current conditions, the costs and risks associated with adopting the euro outweigh its potential benefits.