Published by Global Banking & Finance Review®
Posted on March 5, 2026
3 min readLast updated: April 1, 2026
Add as preferred source on GoogleThe US warns Czech plans to cut core defence funding in the 2026 budget risk dropping spending to around 1.8% of GDP—leaving Czechia among NATO’s lowest contributors and undermining alliance-wide capability goals.
PRAGUE, March 5 (Reuters) - The Czech Republic may slip to the bottom of NATO's defence-spending ranks after Prime Minister Andrej Babis's government proposed a 2026 budget that trims core military funding, spurring a U.S. warning Prague may miss its own capability targets.
"At around 1.8% of GDP (gross domestic product), Czechia would risk being among the lowest spenders in the Alliance – and would be demonstrating negative momentum compared to peer NATO partners," U.S. Ambassador to Prague, Nicholas Merrick, told a security conference on Thursday, a document on the embassy website showed.
Babis, the populist ANO party chief who returned to power after an election last October, has refused to align budget plans with the military alliance's pledge to raise defence spending to 3.5% of GDP plus 1.5% on other defence-relevant investments over the next decade.
Babis's cabinet cut core defence spending by 21 billion crowns ($998.95 million) in the 2026 budget draft from a previous proposal by the outgoing centre-right cabinet.
This would put core defence spending at below 1.8%, marginally lower than last year in relative terms, and at 2.07% including funds for road projects and strategic material reserves that the government identifies as defence but experts say may not be recognised as such by NATO.
"This level of spending means Czechia risks not meeting its self-identified capability targets. If Czechia fails to fulfil its commitments, it impacts the entire Alliance," he said.
The United States, under President Donald Trump, has been pushing allies in Europe to beef up their armed forces after decades of low investments.
The previous Czech government had pledged to raise defence spending by at least 0.2 percentage point per year, rising to 3.0% in 2030.
Babis, whose first steps in office included subsidising energy prices, said last week the country was "certainly not" on the path to raising core defence spending to the 3.5% target.
Politically, Babis is a supporter of Trump, and the government has also backed U.S. strikes on Iran.
The 2026 budget is being debate by parliament, where the opposition has proposed to raise funding for defence.
($1 = 21.0220 Czech crowns)
(Reporting by Jan Lopatka; Editing by Bernadette Baum)
The US warns that Czech defence cuts could leave the country among NATO's lowest spenders, risking its ability to meet capability targets.
The proposed core defence spending is around 1.8% of GDP, lower than NATO's recommended targets.
The Czech government reduced core defence spending by 21 billion crowns ($998.95 million) in the 2026 budget draft.
Failing to meet its commitments may impact the entire NATO alliance's effectiveness and solidarity.
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