Czech President Milos Zeman signed the euro area’s permanent bailout fund, a mechanism that his predecessor Vaclav Klaus called “monstrous.”
Zeman, who replaced Klaus as the head of state on March 8, signed an amendment to the European Union’s treaties linked to the establishment of the European Stability Mechanism today. Zeman also raised the bloc’s flag above his Prague castle seat, something Klaus refused to do during his 10 years in office, at a ceremony attended by European Commission President Jose Barroso.
Klaus, a critic of the euro area and the EU’s handling of the sovereign debt crisis, refused to sign the amendment to the treaties, saying the euro rescue mechanism was “monstrous, meaningless and absurd.” Klaus didn’t have the power to veto the ESM and the rescue fund became operational without his signature.
The Czech Republic has no target date for joining the euro region and Zeman said last month the currency switch is possible in five years at the earliest.
EU leaders approved the ESM amendment in March 2011 as part of their efforts to overhaul governance of monetary union and equip the euro area with the institutions and policies necessary to tackle the fiscal crisis.
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