EU must learn lessons from Brexit! Czech PM snubs eurozone until bloc delivers reforms

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Andrej Babis insisted Brussels would have to give up control over member states’ budgets before Prague joins the eurozone. He said European capitals should be allowed to use their own spending plans “more reasonably”. “The Czech Republic is ready to enter the eurozone,” Mr Babis said in an interview.

“But in this situation, when we expect some reforms to EU governance, we choose to wait.

“The euro is more of a political than an economic project.

“Besides that, we are now seeing serious structural challenges that are potentially very dangerous: tensions between the prosperous northern members of the EU and the stagnating south were clearly visible during the post-pandemic recovery package negotiations.

“And while the 19 states of the eurozone have a common currency, they still have different economic approaches and follow different budget strategies.

“No one has the power to force heavily indebted countries to act more reasonably.”

Mr Babis’ comments come after last month’s acrimonious negotiations over the EU’s next seven-year budget and coronavirus recovery fund.

Northern and southern member states clashed over how much cash should be spent on the bloc’s most pandemic-ravaged regions and industries.

While the final package was seen by some as a step towards the creation of a European superstate, the Czech leader insisted the bloc should learn from Brexit when asking states to hand even more of their sovereignty over to Brussels.

“Still, the fact that we criticise some aspects of the EU integration process does not mean that we are against the idea of European integration in general,” he added.

“Constructive criticism in the post-Brexit EU is necessary.”

In April 2019, 75 percent of Czechs said they were against the adoption of the euro.

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Since then, Mr Babis has set no official programme up for entering the single currency bloc.

In the wake of the coronavirus pandemic, the eurozone faces its worst-ever recession after governments were forced to shut down their economies to halt the spread of the virus.

It suffered its deepest contraction on record when its GDP slumped 12.1 percent in the second quarter of 2020.

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Andrew Kenningham, chief Europe economist at the consultancy firm Capital Economics, said: “There are few silver linings in the data published today, which confirm that eurozone GDP slumped just as much as feared in the second quarter and that inflation remained well below target.

“While parts of the economy have sprung back to life over the past couple of months, the damage already done combined with the current and potential future impact of the virus mean that the recovery will be painfully slow.”

Eurostat, the EU’s statistics agency, said the slump had wiped out a decade and a half of expansion.

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