By GORDON FAIRCLOUGH And LEOS ROUSEK

The Wall Street Journal

The new Czech central bank governor said uncertainty surrounding the euro zone in the wake of the Greek debt crisis is so great that there is no point considering adopting the common currency for now and expressed serious reservations about possible new Europe-wide regulations.

Miroslav Singer, a former vice governor of the Czech National Bank who was named to the top job last week, also said Czech interest rates are likely to stay at their current low levels "longer than people generally think." But he said further cuts were unlikely unless the economy slowed sharply.

"I feel very comfortable with the current level of rates," Mr. Singer said in an interview Thursday with The Wall Street Journal. In May, the bank's rate-setting board cut the benchmark two-week repurchase agreement rate by 25 basis points to a record low of 0.75%.

The Czech economy is slowly recovering after a severe downturn last year when recession-hit Western European consumers bought fewer Czech-made cars, auto parts, electronics and other exports. Gross domestic product, a broad measure of economic output, shrank 4.3% in 2009, but grew 1.1% year-on-year in the first quarter of this year.

The governor said government-debt problems in Greece and other euro-zone members and the group's subsequent bailout efforts showed that changes are likely needed in the currency bloc's institutions as well as the requirements it sets for new members.

"I don't even have a clue how long it will take to solve the problems of the euro zone," Mr. Singer said. And until that happens, he said, "there are simply too many hypotheticals for me to speculate" on whether joining would help the Czech economy.

The Czech Republic, the Baltic states of Estonia, Latvia and Lithuania, plus Poland, Hungary, Romania and Bulgaria are all required as a condition of their membership in the European Union to pursue the adoption of the euro, although there is no deadline for joining.

The Czech Republic hasn't laid out any time frame for adopting the euro. The country would still need to substantially reduce its government budget gap in order to qualify under the euro zone's current rules.

"At the moment it is really difficult to be a euro zone enthusiast and rush to adopt the euro," said Radomir Jac, chief economist at Prague-based PPF Generali Asset Management. "This is the deepest crisis in the euro zone's ten-and-a-half year existence."

Retaining an independent currency can also give national authorities more tools for dealing with bad economic times. One reason Poland was the only EU country last year whose economy expanded was that the zloty was able to depreciate, making Polish exports more competitive.

Still, Estonia has forged ahead and its bid was endorsed in May by the European Commission, opening the way for it to adopt the euro in 2011. Latvia's target for joining is Jan. 1, 2014. Romania has said it is aiming to join by 2015. But the IMF, which has extended a bailout loan to the country, has said that it could be wiser to delay further.

Poland, on the other hand, has said setting a timetable for euro-zone membership is no longer a priority, but the country would still like to join when the current crisis is over. The European Commission says that Bulgaria, Hungary and Lithuania have no target dates for joining.

Public support for membership has also declined in some places after the Greek crisis. A May survey of small and medium-sized enterprises by the Czech Chamber of Commerce found that just 20% supported adoption of the euro. In Poland, an April poll by the Warsaw School of Economics found that support for the euro fell to 42% from 55% a year earlier.

And President Vaclav Klaus, the Czech Republic's largely ceremonial head of state, long has been an outspoken skeptic on the subject of EU integration. Mr. Klaus delayed ratification of the Lisbon treaty, designed to streamline decision-making in the bloc, until the Czech Republic received the right to opt out of some provisions.

The euro zone requires governments to have budget deficits smaller than 3% of GDP. The euro's debt-troubled nations, such as Greece, far exceed these limits. The Czech Republic's budget deficit this year is projected to equal about 5.3% of GDP. The head of the new governing coalition has said he will aim to cut that significantly by next year.

Mr. Singer from the central bank also said he worries that the EU's approach to financial regulation is wrong-headed. "We do not agree this crisis has been caused by a lack of international regulation," he said. The blame, instead, belongs to national regulators, such as those in the U.S. and United Kingdom, which failed to adequately police their financial sectors, he said.

He was especially opposed to proposals to levy a tax on banks across the EU. The move, aimed in part at limiting the growth of the banking sector, would be inappropriate for the Czech Republic which, he said, would benefit from more and larger financial institutions.

Mr. Singer also warned of a rising risk of political influence in bank supervision and regulation if the EU moves forward with region-wide plans. European regulators could "decide on political grounds that some sovereign debt is better than the market believes," in order to bolster the perceived financial soundness of member states and banks. "I see a risk of that."

On rates, Mr. Singer, who voted for the May rate cut, said he expects them to stay low. But he said further cuts would be difficult. "It would be very difficult to find a consensus for further easing," Mr. Singer said. "I think the economy would have to send much stronger signals for this board to cut."