President Pavel Signs CZK 310B Deficit Budget; Defense Up CZK 24B but NATO 2% Target Uncertain

President Pavel signed the CZK 310B deficit state budget (revenues CZK 2,118B, expenditures CZK 2,428B) after months of provisional financing. Defense spending rises CZK 24B year-over-year, but US officials criticized Czech defense spending as likely to reach only 1.7% of GDP versus the 2% NATO commitment. The budget prioritizes highway construction, EU co-financed projects, and army modernization while reducing the structural deficit to 1.75% of GDP.