Babiš Cuts Defense Spending: Czech Republic Falls Below 2% of GDP, NATO Pressures

Parliament Approves Budget — But Defense Suffers

The Czech Parliament approved the 2026 state budget by a narrow 104 to 87 vote, greenlighting defense spending of approximately 155 billion crowns, equivalent to 1.73% of gross domestic product. This puts the Czech Republic in direct conflict with its NATO commitment — member states pledged at the 2025 Hague summit to reach five percent of GDP by 2035, with a basic minimum defense spending target of two percent.

Prime Minister Andrej Babiš defended the decision by pointing to the inherited public finance deficit from the previous government and other political priorities — particularly healthcare. "It's the maximum possible," Babiš declared. His ruling coalition includes the ANO movement, Freedom and Direct Democracy (SPD), and Motorists, whose rhetoric leans towards Euroscepticism and rejecting continued support for Ukraine.

Pavel Warns: We Will Lose Allies' Trust

President Petr Pavel, himself a seasoned army general, has repeatedly called on lawmakers to increase the defense budget. "States cannot draw on common security at the expense of others," Pavel emphasized, warning that the spending cut undermines the Czech Republic's position with key allies. Although he expressed disagreement, he indicated that he would sign the budget — defense policy, according to him, is the responsibility of the government.

U.S. Ambassador to Prague Nicholas Merrick added diplomatic pressure from overseas: "If the Czech Republic does not meet its commitments, it will affect the entire alliance." The U.S. envoy to NATO then called on all allies to pull together, directly in response to the Czech vote.

Pavel's Baltic Trip: Different World, Different Priorities

While Prague argued over budget figures, President Pavel visited Latvia and Lithuania. After meeting with Lithuanian President Gitanas Nausėda, Pavel admitted that he had gained "a completely different perspective" compared to the domestic debate. In the Baltic states, he said, no one discusses the origin of the threat or whether the risks even exist — support for defense is a cross-party consensus there. Nausėda himself stated that refusing to increase defense budgets undermines confidence in NATO.

SAFE Program: Billions from Brussels, But With Conditions

A parallel to the domestic dispute is the European instrument SAFE (Security Action for Europe), adopted by the EU Council in May 2025. This is a fund of 150 billion euros in the form of preferential loans to member states for joint arms purchases. The Czech Republic has been promised over 2 billion euros — just as France received approval for its SAFE drawdown plans at the end of February 2026.

However, tension is not only coming from within: Polish President Karol Nawrocki vetoed Poland's participation in the SAFE mechanism, citing concerns about the loss of sovereignty. The question of whether EU member states will actually meet the conditions for drawing on the funds, especially when they are not meeting the basic 2% of GDP target, remains open.

Methodological Dispute: What Actually Counts as Defense?

Government officials argue that if defense-relevant items from other ministries — such as the Ministry of Transport — are added to the Ministry of Defense's expenditures, the two percent threshold will be met. However, the Czech Fiscal Council has expressed doubts: some of the expenditures included in this way may not correspond to NATO methodology. The final assessment of compliance with commitments will therefore only come retrospectively.

The dispute over defense spending thus reflects a deeper division in Czech and European politics — between a realistic view of security threats and pressure to maintain the social state in a time of strained public finances. And at a time when all of Europe is reassessing its security architecture due to the war in Ukraine and instability in the Middle East, the Czech reluctance to pay the defense bill resonates far beyond the country's borders.