(PRAGUE) - The Czech government Wednesday approved a plan for the switch to the European Union's single currency, but did not fix a date for the changeover to take place, Prime Minister Mirek Topolanek said.

The finance ministry has already described 2012 as a "realistic" date for adopting the euro currency while cautioning that cutting the country's ballooning budget deficit is a precondition for this to take place.

Topolanek said a euro adoption date could be fixed once a raft of tax and spending cuts approved by his government last week have been given the go ahead in parliament.

"It is not until afterwards that we can take a perspective on euro adoption. Without these reforms, all debate is useless," Topolanek explained.

The Czech National Bank will by the end of June draw up a detailed analysis of all the steps related to euro adoption required he added.

Topolanek added that Prague would draw lessons from the experience of Slovenia, which switched to the euro on January 1 this year, and neighbouring Slovakia which has set a target date for euro adoption of January 1, 2009. Slovakia joined the Exchange Rate Mechanism II, which allows the country's currency to fluctuate within a band against the euro, in November 2005 and is regarded as the waiting room for entry into the euro zone.

Topolanek added that prices would be displayed in both koruna and the euro during a five-month period leading up to the changeover and 12-months afterwards in order to prevent unjustificable price rises.

"The protection of the consumer and minimalisiation of costs for the public and private sectors are of crucial importance," the Ministry of Finance said.

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