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Prague – The results of the European elections have contributed to the weakening of the euro against the dollar and have also reduced the chances of the early adoption of the common European currency in the Czech Republic. Economic analysts consulted by CTK agree on this point. The strengthening of the far right and the weakening of the Greens, according to experts, could complicate voting on issues related to climate protection, but they do not expect significant changes to the Green Deal for Europe. They also believe that European support for Ukraine could be more complicated.
“The clear loser of the European Parliament elections is the common currency of the eurozone countries. In response to the election results, it weakened against the US dollar to its lowest level in a month,” said Petr Lajsek, an analyst at Purple Trading, assessing the election impact. He pointed out that opponents of the common European currency from France and Germany have strengthened in the European Parliament. “Similar positions are held by the newly elected MEPs in the Czech Republic. Only about a quarter of them are clearly in favor of adopting the euro,” Lajsek said.
The chief economist of Trinity Bank, Lukáš Kovanda, believes that interest in adopting the euro in the Czech Republic will decrease in light of the election results. “After yesterday’s European elections, it is more apparent that support for the euro is close to political suicide,” he noted.
According to analysts, the elections will also impact the debt financing of European countries. “Investors on the bond market do not like the election results, which are leading to an increase in yields, i.e., making national debt more expensive,” said Cverna. “Yields on Czech government bonds are rising only slightly and reach 4.19 percent on ten-year maturities,” Cverna added.
Hradil does not anticipate fundamental changes in the functioning of European institutions in the economic area. “Although politicians representing opposition to the current mainstream have made partial gains overall, the existing majority still defended its position. Therefore, while one can expect cosmetic changes in the approach to migration or climate policy, Europe’s declining global economic competitiveness will likely remain a proverbial ‘elephant in the room’ in Brussels, a topic that is noticeable but hardly discussed. Europe will likely continue to be a world leader in economic regulation, which will struggle to respond to dynamic global changes,” he said.