Czech Government Secures Confidence Vote Amid Budget and Ukraine Policy Changes

Czech Government's Confidence Vote and Policy Shifts

PRAGUE, Jan 15 (Reuters) - Czech Prime Minister Andrej Babis' populist right-wing government won a parliamentary confidence vote on Thursday, taking power with an agenda of scaling back support for Ukraine, opposing EU environment policies and pausing the previous administration's austerity drive.

Government's Agenda and Budget Plans

Babis, a self-described Trumpist allied with Hungary's Viktor Orban and the far-right in the European Parliament, won an election in October and his ANO party formed a ruling coalition with a pro-Russian far-right party and another right-wing party.

Support for Ukraine and Foreign Policy

Controlling 108 of the lower house's 200 seats, ruling party lawmakers approved the government in a 108-91 vote, a constitutional step required after the administration took office last month. 

Parliamentary Vote Outcome

Babis campaigned to raise wages and cut taxes, in contrast to a budget consolidation drive during the previous centre-right government's term. The fiscal gap fell comfortably below the European Union's 3% of economic output ceiling in that time.

Babis has also stressed more money is needed at home as he seeks to reduce support for Ukraine, which has fought a Russian invasion since 2022.

SCALING BACK HELP TO UKRAINE

The Czech Republic joined Slovakia and Hungary in December to opt out of the financial costs of an EU loan to Ukraine, agreed at Babis' first EU summit since returning to power. 

Babis, who also ruled from 2017-2021, has said the country will also stop contributing to a Prague-led programme sourcing ammunition supplies for Ukraine, although last week he said it could continue to coordinate the initiative, which runs mainly on donations from countries like Germany.

Babis had previously sought to scrap the programme, which he calls non-transparent, and his decision to leave it running angered his coalition partner, the far-right SPD party.

The previous government started the programme, which has become a key supply tool for Kyiv. It brings donors together with Czech defence officials and arms traders and producers who purchase ammunition around the world for Ukraine to reduce its disadvantage on the battlefield.

In foreign policy, opposition parties have pushed the government to join European countries supporting Greenland, which U.S. President Donald Trump has sought to take over from Denmark. Babis' government has said that dialogue on the issue is needed.

Another urgent task for the government will be approving a 2026 budget plan this month. The state has started 2026 with a provisional budget, which limits monthly spending to one twelfth of last year's expenditure.

Officials have flagged a growing gap. The central state budget deficit last year rose for the first time since 2021.

($1 = 20.8470 Czech crowns)

(Reporting by Jason Hovet, editing by Ed Osmond)