Czech lower house approves higher 2026 budget deficit framework in initial vote

The previous government's draft planned a 286 billion crown deficit, which also included additional spending on ⁠defence and a loan for a nuclear power plant project, which are exempt ⁠from deficit ceiling ⁠rules. Finance Minister Alena Schillerova defended the new draft on X on Tuesday saying the budget was the "maximum that was possible".

The Czech lower house ​gave initial approval on Thursday to ​a 2026 budget framework ‌setting the deficit ​target higher than last year at 310 billion crowns ($15.2 billion) in the first of ‌three readings. The government of populist Prime Minister Andrej Babis took power in December and submitted a new 2026 state budget to parliament, saying the previous ‌government's proposal was unrealistic.

The new budget draft, to replace a provisional framework that ‌the country started the year with and which limits spending, has faced criticism from the Czech fiscal watchdog for breaking the fiscal responsibility law. The first of three votes ⁠sets ​budget parameters for ⁠income and spending, and changes can only come within that framework.

Last year's deficit reached 290.7 ⁠billion crowns. The previous centre-right administration pushed austerity, bringing deficits below the European Union ​limit of 3% of gross domestic product, at around 2% of ⁠GDP in 2025.

Babis' government has sought to use the budget as a tool for growth ⁠while ​keeping the deficit within EU rules. The previous government's draft planned a 286 billion crown deficit, which also included additional spending on ⁠defence and a loan for a nuclear power plant project, which are exempt ⁠from deficit ceiling ⁠rules.

Finance Minister Alena Schillerova defended the new draft on X on Tuesday saying the budget was the "maximum that was possible". ($1 = ‌20.4310 ‌Czech crowns)

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