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Prague/Brussels – Czechia will ask the European Commission and the Council of the European Union to relax budgetary rules due to financing increased defense spending. The Ministry of Finance stated this in response to a query from ČTK today. The intention to request the activation of the so-called national escape clause has already been announced to the European Commission. The plan to increase the EU’s defense capabilities, called ReArm, which was presented by the European Commission in March, includes the relaxation of budgetary rules for defense investments.
According to information from ČTK, only a few countries, including Germany and Poland, have so far requested the activation of the escape clause from the Stability and Growth Pact. Czechia also plans to do so. “We will ask the European Commission and the EU Council, together with other EU member states, to activate the escape clause due to the increase in defense spending,” said Stefan Fous from the Ministry of Finance’s press department to ČTK. According to European rules, the request should be submitted by the end of April.
In March, the Commission published details of the plan to increase the European Union’s defense capabilities called ReArm Europe/Readiness 2030. According to the Commission, this could help find up to an additional 800 billion euros (20 trillion crowns) for defense due to looser budgetary rules and also a new loan plan of up to 150 billion euros. The plan responds to the ongoing Russian aggression against Ukraine and increased pressure from the United States for European members of the North Atlantic Alliance to contribute more to ensuring NATO’s collective security.
The national adjustment of budgetary rules due to defense spending was adopted by the Chamber of Deputies last week. The difference between two percent of gross domestic product (GDP) and the actual volume of defense spending will not be included in the spending limits to which the budgetary responsibility law binds governments from 2026 to 2033. Two percent of GDP is the lower limit for defense spending, which is set by law in Czechia. The country reached this level last year.
According to a previous statement by Prime Minister Petr Fiala (ODS), the defense budget should represent 2.2 percent of GDP next year, and in subsequent years, it should increase by 0.2 percent of GDP annually. By 2030, Czechia is expected to spend three percent of GDP on defense. According to the Prime Minister, the increase in defense funding is necessary given the security situation in the world. (April 30)