CZECH REPUBLIC & CENTRAL EUROPE — 2026-03-16

Czech 2026 Budget Passes with Defense at 1.7% GDP, Below NATO 2% Target

Czech lawmakers approved a 2026 budget allocating $7.4B to defense, 1.7% of GDP, falling short of NATO's 2% target. PM Babiš called it 'the maximum possible,' prioritizing healthcare spending. U.S. Ambassador Merrick warned Czechia risks becoming one of NATO's lowest spenders. The shortfall coincides with Trump's intensified burden-sharing demands and the 2026 NDS explicitly requiring European allies to take primary responsibility for conventional defense.

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