Nov. 19 (Bloomberg) -- Czech central bank Governor Zdenek Tuma said the country can ``afford'' to keep the koruna even if neighboring countries switch to the euro.

``The Czech economy has been growing between 5 percent and 6 percent in the past few years, this is not a failure,'' Tuma said in an interview in Cape Town yesterday. ``Because of that, I can imagine we can afford to stay outside the euro. I don't think in 1990 we expected people would trust the Czech koruna this much.''

The Czechs last year dropped a plan to adopt the euro in 2010. The country, which is committed under European Union rules to give up the koruna, has yet to set a new date. Slovenia so far is the only one of the eight former communist countries that joined the EU in 2004 to become a member of the euro region.

The Czech government of Mirek Topolanek has introduced tax changes and welfare spending cuts aimed at cutting the budget deficit below 3 percent of gross domestic product starting in 2008, and has pledged to overhaul pension and health-care programs by 2010.

`Economic Shocks'

``The decision in our case is not only to push through important reforms but also to have sufficient maneuvering room for economic shocks,'' the 47-year-old Tuma said.

To apply for the euro, countries must meet thresholds for the budget deficit, debt, inflation and long-term interest rates, and enter the exchange-rate mechanism, a minimum two-year test of currency stability.

``I wouldn't like to enter'' the exchange-rate mechanism, ``a system I don't like, then to fail to'' meet ``one of the criteria and then be trapped in the terms of'' the mechanism,'' Tuma said.

By delaying the euro, the Czechs are hoping to avoid the experience of Lithuania, whose euro bid was rejected last year because inflation was too fast. Slovakia wants to switch currencies in 2009.

Tuma said the country will eventually become a member of the 13-member euro region.

``Nobody is saying we're going to postpone it forever,'' he said. ``This is the dilemma: the more successful the country is, the less important the euro is. We are committed to the euro because it's a part of the treaty and we voted for the EU, including the euro. It's just a question of timing.''

Tuma declined to give a date by which the Czech Republic may be expected to adopt the common European currency, stressing the decision would be a ``political'' one.

Premier Topolanek said on state-run public television yesterday that adopting Europe's single currency in 2012 is ``not realistic'' because the country would have to fulfill all adoption criteria as of 2008, which is not possible without an overhaul of the pension and health-care systems.

Czech central banker Mojmir Hampl told Hospodarske Noviny newspaper today that the economy is not ready to switch currencies, and that fast adoption of the euro would increase inflation.

To contact the reporter on this story: Svenja O'Donnell in London at sodonnell@bloomberg.net. Marketa Fiserova in Prague mfiserova@bloomberg.net

Last Updated: November 19, 2007 04:00 EST