Finance
Czech President Signs 2026 Budget Despite Worries Over NATO Defence Spending Commitments
Published by Global Banking & Finance Review®
Posted on March 20, 2026
2 min readLast updated: March 20, 2026
Quick Summary
President Petr Pavel signed the Czech Republic’s 2026 budget into law on March 20 but warned that defence spending—set at just 1.73% of GDP by the new government—is inadequate given rising security threats and NATO obligations.
Czech President Signs 2026 Budget, Raises NATO Defence Spending Concerns
Overview of the 2026 Czech Budget and Defence Spending
PRAGUE, March 20 (Reuters) - Czech President Petr Pavel signed the 2026 budget into law but warned defence outlays were not corresponding to growing security threats and NATO spending commitments, his office said on Friday.
"The president views the state of the defence budget with great concern," his office said in a statement.
"He points out that with the current growth of security threats, the defence budget is essentially stagnating and does not correspond to the obligations to NATO allies."
Disagreements Over Defence Budget Allocation
The president has been at odds with Prime Minister Andrej Babis' government over its plans to scale back defence spending in the 2026 budget versus a previous proposal.
Babis' populist ANO party took power in December and revamped the previous centre-right government's budget, leaving the country to start 2026 with a provisional budget that has limited spending.
Pavel said he did not want to stand in the way of the new budget taking effect.
International and Domestic Criticism
DEFENCE SPENDING PLANS CRITICISED BY US
The Czech fiscal gap has fallen below European Union limits of 3% of gross domestic product.
The new budget, with a deficit of 310 billion crowns ($14.65 billion) that is above the previous plan, has allocated an amount equal to 1.73% of GDP to the defence ministry, 21 billion crowns less than previously proposed.
NATO Commitments and Budget Controversy
Babis' government says defence spending will be above 2% of GDP - NATO's current commitment which is due to rise in coming years - when factoring in spending in other departments, such as for road projects. But the president and budget watchdog warn it includes transport spending that NATO may not recognise.
"Saving on defence is short-sighted, especially in today's geopolitical situation," the presidential office statement said.
Babis has said money was needed elsewhere, like in healthcare, and says the Czech Republic will meet its NATO commitment.
Reactions from the United States
The U.S. Ambassador to NATO Matthew Whitaker said on X on March 12, after the Czech lower house approved the budget, that all allies "must pull their weight", which followed similar criticism from the U.S. ambassador to Prague.
($1 = 21.1580 Czech crowns)
(Reporting by Jason Hovet)
Key Takeaways
- •President Pavel signed the 2026 budget despite misgivings over defence allocations—1.73% of GDP, 21 billion crowns less than previous proposal.
- •Prime Minister Babiš’s populist government argues broader spending (e.g., infrastructure) will push total security-relevant outlays above NATO’s 2% target, but NATO may not recognise these inclusions.
- •U.S. diplomats, including NATO Ambassador Whitaker and Ambassador Merrick, have publicly urged Prague to honour its NATO commitments, warning of adverse implications for the alliance.
Frequently Asked Questions about Czech president signs 2026 budget despite worries over NATO defence spending commitments
1Why did President Petr Pavel express concern over the 2026 budget?
President Pavel warned that defence spending is stagnating and does not meet NATO commitments, citing rising security threats.
2How much of the Czech GDP is allocated to defence in the 2026 budget?
The 2026 budget allocates 1.73% of GDP to the defence ministry, below NATO's current 2% target.
3What is the main disagreement between President Pavel and Prime Minister Babis?
The disagreement centers on proposed cuts to defence spending and whether the budget meets NATO obligations.
4How has the US commented on the Czech defence budget?
US officials, including the Ambassador to NATO, have called for all allies, including the Czech Republic, to meet their defence spending commitments.
5What is the deficit set in the Czech 2026 budget?
The budget sets a deficit of 310 billion crowns, which is higher than the previous plan.
