By Martin Dokoupil
BRNO, Czech Republic, Sept 15 (Reuters) - Czech Prime
Minister Mirek Topolanek resisted pressure on Monday to set a
target date for euro adoption from industry leaders squeezed by
a strong crown currency and the global downturn.
The crown, helped by a robust economy, became a safe haven
for investors this year, climbing to an all-time high of 22.925
per euro <EURCZK=> in July before a correction to 24.175 on
Monday.
The crown jump -- which peaked at 19 percent year-on-year --
has sparked demands from industries, highly dependent on exports
to the euro zone, that the Czechs emulate Poland by seeking
swift euro zone entry.
"Setting of the euro adoption date will raise planning
certainty for companies and decrease interest in crown
speculation," said Martin Jahn, head of Volkswagen's <VOWG.DE>
Russian operation and deputy head of the Czech Confederation of
Industry.
"It is evident that the Czech economy and industry need the
euro," he told a gathering of industry leaders.
But as signs emerged that Poland could now be pulling back
from plans to adopt the euro as soon as 2011, Topolanek resisted
the calls to set a target date.
"I hope that you are not expecting the euro adoption date
from me today," he told the meeting. "We are not at the
finishing line yet and it would be completely irresponsible to
adopt the euro before we are ready for it."
Czech businesses would like to see the country swapping
crowns for euros as fast as possible, preferably by 2012, but
the government does not expect to join until some time after
that.
Topolanek said the central European country first needed to
synchronise its economic cycle with the euro zone and complete
key fiscal and pensions reforms.
Poland last week it aimed to join the euro in 2011, setting
what markets viewed as a very ambitious deadline that sent the
zloty currency sharply higher.
On Monday, however, a senior government source in Warsaw
said Poland may step back from that schedule and actually begin
using the single currency only in 2012.
Neighbouring Slovakia will start using euros in January.
Confederation of Industry chief Jaroslav Mil told the
gathering that firms were being hit by the strong crown. They
also feared the forthcoming Czech presidency of the European
Union, starting in January, could slow or even halt reforms
needed for euro adoption.
"If we do not complete reforms now ... then we are speaking
about having the euro sometimes around 2018 and this is too
late."
A survey showed last week the strength of the Czech crown
was forcing nearly 30 percent of companies to slash jobs and
consider moving some operations abroad. In another survey, 82
percent of firms said euro adoption would solve the problems.
But central bank Vice-Governor Mojmir Hampl told delegates
that fixing the exchange rate would not solve their problem.
"What is important is domestic economic policy, not fixing
of the exchange rate. This my strong belief," he said.
(Reporting by Martin Dokoupil; editing by John Stonestreet)
