Mladá fronta DNES | 14.9.2005 | section: Názory | page: 6 | author: JOSEF ZIELENIEC
The Euro is just a name, says Martin Komárek in his article (MFD 5/9/2005) and adds that accepting the Euro is just a technical, not an ideological issue. The author says that the Euro causes neither much damage nor does it bring much. The author is wrong.
Introducing the common currency is a highly political act of the Czech Republic which has far-reaching consequences not only for the economy but also, maybe mainly, for our political system and our political life.
The microeconomic framework of any modern economy is set by its monetary and fiscal policies. The central bank, which is running the currency, is responsible for the first one, the government and the parliament, which decide in budgetary and fiscal matters, are responsible for the latter. Harmony or disharmony between the central bank and the government and the parliament is often decisive as quality of the economic environment of a country is concerned. In other words, this harmony decides the efficiency or decline of a given economy.
The same applies to the Euro and this is the key to all this issue. The European Central Bank is on the one side; it is administering the Euro and has its monetary policy. The fiscal policy is, on the other hand, almost entirely in the hands of each member state. To prevent a member from solving its problem at the expense of others, the Maastricht criteria, in other words the so-called Pact of stability, have been introduced to limit member states’ possibilities in budgetary deficit matters, loans and inflation.
This visibly inflexible system forces the European Central Bank to lead a very conservative monetary policy. All this creates a rigid macroeconomic environment and the European Union pays dear for this.
To stand up to global economic competition, the European currency must become the important factor of economic growth and this will not be possible before a European political system is put into place. Until a real European executive, elected by European citizens, with a mandate to cooperate on the formation of European macroeconomic environment is formed, the EU will have problems with its economic growth and competitiveness. Therefore, neither the introduction of the common currency, nor joining the Euro zone are purely technical issues as they go together with the creation of a European political system. This is, in this sense, one of our commitments. The Euro is not just a name, it is a political challenge.