Czech National Bank Governor Aleš Michl warned that pushing for premature euro adoption and lower interest rates risks destabilising the economy, calling the push from Prime Minister Andrej Babiš and President Petr Pavel “mistimed”. Michl said Babiš’s demand for rate cuts conflicts with the bank’s inflation‑fighting stance, while Pavel’s euro campaign lacks sufficient economic convergence with the Eurozone. He stressed that the bank must stay independent of both sides in what he described as a “battle of mistimed ideas”.

The CNB recently raised its benchmark rate to 3.75% to counter wage growth and inflation, with headline inflation near the 2% target but core inflation still just below 3%. Michl argued that a premature euro switch could fuel inflation by raising wages and costs, and that flexible koruna exchange rates remain a tool for price stability. The warning comes amid a power struggle between the pro‑EU Pavel and the Eurosceptic Babiš, who returned to power after his ANO party won parliamentary elections in December 2025.

While all EU members except Denmark must eventually adopt the euro, there is no fixed timetable, and Michl urged that any move should be based on strict convergence criteria, not political pressure.