The new Czech government, led by the ANO party, is at odds with the outgoing administration over the 2026 budget. The dispute centers around the budget's lack of funds for infrastructure and social programs, which the ANO party and its allies argue is necessary to meet their campaign promises.

The outgoing government, led by Prime Minister Petr Fiala, has already resubmitted the budget plan. However, the ANO party and its allies, the right-wing Motorists party and the far-right SPD, claim the draft does not allocate enough funds for their priorities. They argue that the budget should be increased to 381 billion crowns, up from the current 286 billion crowns.

The budget committee, led by ANO and its prospective partners, has recommended that the full lower house reject the draft. They have given the outgoing government 20 days to resubmit a revised plan, possibly with a higher deficit. Alena Schillerova, ANO's budget expert, has stated that if the outgoing government cannot cover the changes recommended by the committee, they should increase the budget deficit for 2026.

The outgoing Finance Minister, Zbynek Stanjura, has defended the draft, stating that it fits within the state's fiscal responsibility laws. He has accused the election-winning parties of using the draft as an "alibi" to raise spending. The Fiala government has been working to cut the fiscal deficit, making the Czech Republic the only central European state to return it to below 3% of GDP, as required by the European Union.

The dispute raises the risk that the budget may not pass through parliament by the end of the year. If this happens, the country would enter 2026 on a provisional budget plan that limits spending to one-twelfth of last year's annual expenditure per month.

The ANO party's campaign promises of higher wages, more benefits, and tax reductions have raised expectations of looser fiscal policy. However, the outgoing government argues that the budget must remain responsible and within legal limits.

ELECTION WINNERS

Czech Budget Battle: New Government Wants More Spending

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