Czech c.banker says 2012 euro entry still possible

...Niedermayer said on Tuesday.

The Finance Ministry has given up on trying to set 2012 as an official entry target after opposition from Prime Minister Mirek Topolanek and the central bank, which has also recommended not to set any specific date at this point.

High budget deficits have forced the Czechs to abandon their original entry date of 2010, and the fiscal gap remains the main obstacle to euro adoption.

But Niedermayer said on Czech Television 2012 was still possible if the government wanted it.

"The year 2012 in my opinion is still perfectly possible, because it is far enough and we have to put the fiscal policy into shape anyway, but it is a question of political priorities," Niedermayer said.

"Even 2010 was perfectly possible, because had there not been the pre-election (spending) lunacy, then I believe we would get under 3 percent," he said, relating to budget deficit as measured against gross domestic product (GDP).

He said political priorities may change, and technically it was still possible to get into the euro zone by 2012.

The government aims to cut the budget deficit to 3.2 percent of GDP next year and 2.5 percent in 2010 from an expected 4 percent this year.

The cabinet will discuss on Wednesday an updated euro adoption strategy without any target date.

[PRAGUE/Reuters/Finance.cz]