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Czech Lawmakers Reject 2026 Budget, Returning It to Outgoing Government for Revision
Czech lawmakers have sent the 2026 draft budget back to the outgoing government for revisions, raising the risk of delays and a higher-than-expected deficit. The ANO party says the plan lacks billions needed for key expenditures, setting up a fiscal showdown just as a new government is expected to take shape.
Czech MPs Return 2026 Budget to Outgoing Government, Citing Major Gaps in Spending Plan
The Czech Republic’s lower house voted late Wednesday night to send the draft 2026 budget back to the outgoing government for revision, increasing the likelihood of legal delays and a larger-than-expected fiscal deficit.
The populist ANO party of Czech billionaire Andrej Babiš—victorious in the October elections and currently leading talks to form the next government—clashed with the departing centre-right cabinet over the draft budget, arguing that it falls short by billions of euros needed to meet expected expenditures.
While the outgoing administration has focused on fiscal consolidation to keep the deficit within EU limits, analysts say ANO is likely to adopt a looser approach based on its campaign promises, including wage hikes, selective tax cuts, and higher spending.
During a session that stretched late into the night, MPs voted 105–64 in favour of returning the draft budget, backed by ANO and its coalition partners.
20 Days to Rewrite the Draft
The outgoing government now has 20 days to revise the proposal. It has maintained that it cannot legally increase the deficit any further.
Earlier this month, it resubmitted the 2026 plan with a projected deficit of 286 billion crowns ($13.72 billion), up from an estimated 241 billion in 2025.
ANO, aiming to form a government by mid-December, argued that the budget underestimates funding needs by almost 100 billion crowns, particularly for transport infrastructure and other essential spending.
Elena Schillerová, ANO’s nominee for finance minister, told Czech Television on Wednesday that a realistic plan must be prepared — even if it requires increasing the deficit.
The Finance Ministry currently projects a general government fiscal deficit — covering the state budget, regional and local administrations, the health insurance system, and various off-budget funds — at 1.9% of GDP for 2026, the same level as this year and well below the EU’s 3% threshold.
The dispute raises the risk that the budget will not be passed by Parliament before the end of the year. If that happens, the country would enter 2026 under a provisional regime, allowing the government to spend only one-twelfth of the previous year’s expenditures each month.
