Does paying by card when traveling abroad protect Czechs from additional costs or Czech companies with euro bank accounts from currency exchange costs when exporting goods? No, that's not true: Payments by card abroad still involve transactional costs charged by banks or other providers, and for companies, to have a foreign currency account is also more expensive than having a domestic currency one. Czech companies that export to the eurozone also have to hedge against currency swings, as the Czech Republic still uses Czech korunas and not euros, thus incurring extra costs.
A claim implying that using credit or debit cards when paying abroad and having foreign currency accounts, for companies, are sufficient measures to erase costs linked to the fact that the Czech Republic still uses its currency instead of adopting the euro appeared in a video (archived here) published on TikTok on May 23, 2024. The caption overlay on the video in Czech reads, translated by Lead Stories staff into English:
Neither during the Protectorate nor during the occupation did anyone impose their currency on us
Mrs. Nerudova, every company has a foreign exchange account, we pay by card on holidays. Do you think we have no brains.
This is what the post looked like on TikTok at the time of writing:
(Source: TikTok screenshot taken on Wed Jun 5 07:48:34 2024 UTC)
The above claims are in response to a social media post by Danuse Nerudova, a leading candidate of one of the government coalition parties STAN for the European Parliament elections on June 7-8, 2024. She argues that the Czech Republic should adopt the euro, saying it would eliminate transaction costs for travelers who need to exchange leftover euro cash back into korunas, and for businesses that use both korunas and euros and need to hedge against risks associated with currency fluctuations.
While the debate over the Czech Republic's adoption of the euro has become mainly a political issue (archived here), with most of the public opposed to the move (archived here), for economists there are both advantages and disadvantages (archived here), with some arguing that having an independent monetary policy (archived here) is better for the economy than being part of the multinational eurozone. Others stress that for the Czech economy, based on exports, the eurozone is the country´s main trading partner (archived here) and say that the advantages of having the euro are indisputable. It is a complex issue and such arguments are beyond the scope of this fact check. However, the arguments against Nerudova that card payments and foreign currency accounts eliminate transaction costs for consumers and businesses are flawed.
The government´s website dedicated to explaining the euro-adoption process to the public lists traveling made easier, without the need to convert korunas into euros, as one of the advantages of having the euro in the future for consumers. It also says that it will be "cheaper to pay with credit cards," as banks and other providers will not charge currency conversion fees when using them in the eurozone (archived here). It also says it will be easier for consumers to compare prices in different countries.
There are also other complications for consumers when paying abroad with a debit or credit card, such as the option to choose a so-called dynamic conversion rate (archived here), which is usually disadvantageous for them.
The government´s website also states that the introduction of the euro would eliminate complications for companies (archived here) that trade with the eurozone, as they have to consider the impact of currency swings in their financial planning. Because such fluctuations are unpredictable in the long run, they can pose significant risks to companies, that need to pay for hedging services to at least partially eliminate them. Also, maintaining and using foreign currency accounts at their bank tends to be more expensive for companies than using domestic currency accounts, the website says.
By joining the European Union in 2004, the Czech Republic committed to adopting the euro (archived here) in the future, and the government, together with the Czech central bank, set out principles for doing so in a policy document (archived here) updated in 2007. The Czech Central Bank and the Ministry of Finance also publish an annual assessment of the fulfillment of the Maastricht convergence criteria (archived here). In 2023, the Czech Republic failed to fulfill two of the four required criteria, according to the report.
Although the country has met the Maastricht criteria in the past (archived here), no government has set a date for adopting the euro, mainly due to global economic and domestic political reasons, as most Czechs are traditionally opposed to the euro. Czech President Petr Pavel recently stirred up a public debate (archived here) when he raised the issue again and supported the move. Some opposition and populist parties argue that there should even be a referendum on the euro (archived here).
Danuse Nerudova (archived here) has advocated the euro adoption in her campaign for the European Parliament election. A pre-election debate from May 28, 2024 that also features Nerudova's views on the currency can be seen here (archived here).
