Europe: Skoda believes the Czech Republic should hasten the euro adoption image

According to the chief of the local VW AG division – Skoda Auto AS – the Czech Republic would have numerous advantages if it decides to switch to the euro currency and should do so immediately after the Greek debt crisis winds down.

Winfried Vahland, the chief executive officer of Skoda – the affordable unit of the largest European automaker and the second-biggest in the world, VW AG – said it remains up to the Czech government to decide when to enter the monetary union but in the automaker’s opinion 2018 would be the right time for the ex-communist European Union member to switch to the unified currency. Skoda Auto, which is 120 years old, is the largest industrial company in the country and also its main exporter. “I am convinced that anyone who wants to function properly within the EU must adopt the euro,” commented Vahland on the sidelines of its 2013 financial results. Naturally, since Skoda exports around 95 percent of its car production, switching to the unified currency would have inherent benefits.

The country’s Prime Minister Bohuslav Sobotka is a proponent of the Euro adoption, but has so far shunned setting a firm date on the switch because the move remains unpopular. But having the possible euro adoption tentatively scheduled “around” 2020 leaves the country’s export-reliant economy fully exposed to currency swings – and the disastrous effects can be seen today in Russia, for example. Skoda announced spectacular financial results for 2014, posting a record net income of 665 million euros ($704 million) and adding that sales for the first time topped the one million mark.

Via Bloomberg