Prime Minister Andrej Babis says Brussels’ proposed budget is “absolutely unacceptable” for the Czech Republic. His comments came just ahead of an informal meeting of EU heads of government in Cyprus.
At issue for the Czech head of state is that EU funds allocated for his country in the new budget period for 2028-2034 would be reduced by 228 billion crowns (€9.4 billion) “for no reason,” according to Hirado.
Babis criticized the proposed changes for distributing budget funds, emphasizing that money should be divided into several packages, not lumped together. “The European Commission has now come forward with a proposal to give us agricultural and cohesion funds in one package, and we should distribute them. We don’t like this,” he told reporters.
Importantly, just one country in the EU can block the entire seven-year budget, which generally means Brussels has to work to please everyone or can face major roadblocks.
Agricultural subsidies are a sensitive point for Babis, given his association with the Czech conglomerate Agrofert. During his previous tenure as prime minister, the European Commission found that he had not properly divested control of the company, with auditors advising that Czechia be forced to pay back €10 million in subsidies. Babis called the Commission auditors a “mafia” and denied any wrongdoing. Upon being elected as prime minister again last year, his links to Agrofert again came under scrutiny, with one report indicating he still has influence over the conglomerate.
The Commission is still reviewing the case, but a Czech agency has just signalled that Agrofert should be allowed to receive subsidies, while opponents are claiming only the EC can give the green light.
Meanwhile, NATO head Mark Rutte made a surprise visit to Prague last week, with speculation that the alliance head is trying to convince Babis to increase defense spending. The current budget calls for a decrease in the military budget, meaning the Czech Republic would not meet NATO’s 2 percent of GDP spending goal. At a press conference, Rutte praised the country’s commitment over the years, posting to X: “Important to discuss Euro-Atlantic security & how we can continue to keep our citizens in NATO safe. I thanked Czechia for its contributions to our shared security & we discussed priorities for the upcoming Summit in Ankara.”
Another contentious issue regarding EU funds is that the Czech Republic has consistently received more from the European Union than it has paid into the common coffers. However, Prague analysts estimate this situation may change in the future, given the country’s economic growth. Last year, the Czech Republic received 31.1 billion crowns more from Brussels than it paid into the common coffers, the Czech Ministry of Finance announced.
With its GDP per capita approaching the EU average, and according to a Czech “Prosperity Index,” it is now eighth in the EU’s top ten most advanced economies.
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