* New Czech govt will not set euro target
* Parties say euro zone must find fix to debt
* Public support for euro in Poland, Czech Rep falls
(Adds Poland, quote, analyst, background)
By Robert Mueller
PRAGUE, June 16 Parties building a new Czech
goverment agreed on Wednesday there was no point in aiming for
euro adoption until the euro zone itself deals with its debt
crisis and a survey showed Poles have also cooled on euro entry.
The two developments showed how central Europeans are
rethinking their view of deeper integration towards the euro at
a time when it is being tested by the worst crisis since its
foundation in 1999, and weaker euro zone members struggle with
much higher debt loads than the central European countries.
Czech centre-right politicians building a coalition cabinet
after an election two weeks ago have long had a cautious view of
the timing of euro adoption.
On Wednesday, they agreed their cabinet would not set any
euro entry target until euro zone countries themselves meet the
Maastricht criteria on budget deficits that they demand from
those aiming to join the single currency.
"We agreed not to state the euro entry date for now," said
Viktor Paggio, coalition negotiator for the centrist Public
"The condition for setting such date in the future is that
the Maastricht criteria are observed in the euro zone itself,"
he told Reuters.
The former communist central and east European countries
have committed themselves to adopting the euro at some point,
when they meet conditions that include a budget deficit of below
3 percent of gross domestic product and public debt of less than
They have had to give up earlier set adoption dates due to
lack of fiscal consolidation at home. The Czechs have largely
been cautious about the timing, saying more convergence in
wealth and prices was necessary to win benefits form euro entry.
The financial crisis has blown up any chances they would be
ready to join any time soon, but has also brought a new aspect:
doubts about the euro zone itself.
Pavel Drobil, senior officer for the biggest right-wing
Civic Democrat party that will lead the next government, said
euro stability was a precondition for the Czechs' entry.
"If we should leave the firm stable crown, the euro should
also be firm and stable, which can be ensured by meeting the
rules," said Drobil, who is on his party's coalition negotiating
team for business matters.
Out of 16 euro zone countries, only Luxembourg and Finland
had deficits below the 3 percent level last year.
The Czechs originally set but then later dropped a euro
entry target date of 2010. A Reuters poll showed economists
expect Poland to adopt the single currnecy in 2015 and the Czech
Republic in 2016, but politicians have mentioned even later
Czech policymakers have said that the euro zone itself would
likely have little appetite for expansion any time soon, and
Estonia's entry in 2011 would be the last for a number of years.
EURO LOSING GLITTER
Opinion polls in the Czech Republic and Poland have showed
fewer people are keen on the euro than before the Greek debt
crisis, partly because contributing to aid would be unpopular in
countries that are poorer than the Greeks.
In Poland, nearly half of the population now opposes euro
adoption although the centrist government remains committed to
adopting the unit as soon as possible. [ID:nLDE65F1A7]
The number of Czechs against adopting the euro has jumped by
almost half since February. [ID:nLDE65E092]
Capital Economics' Neil Sharing said the Czech stance on the
euro did not surprise him.
"We would be very surprised if the Czech Republic ever
joined the euro zone," he said.
"It's the dawning realisation that actually being a member
of a single currency and being a member of economic monetary
union required extreme discipline by policymakers and it removes
a number of safety valves that can help the economy get out of
trouble or respond to external shocks."
(Additional reporting by Roman Gazdik, writing by Jana
Mlcochova; editing by Patrick Graham, John Stonestreet)