Czech President Petr Pavel vetoed an amendment to legislation governing the preparation of public budgets on Wednesday. He returned the bill to the Chamber of Deputies, which will now have to vote on it again. According to the president, the changes could threaten the long-term sustainability of public finances and strengthen the government’s powers at the expense of parliamentary oversight.
Pavel warned that the amendment would significantly change the rules under which both current and future governments manage public funds. “This law allows the government to borrow significantly more than it can today,” he said. In his view, the cabinet would gain greater scope to finance spending through debt, with the resulting costs ultimately borne by future generations.
Finance Minister Alena Schillerová rejected the president’s reasoning and announced that the governing coalition intends to override the veto in the Chamber of Deputies. Without the amendment, she said, next year’s state budget deficit could not exceed CZK 150 billion. According to the minister, such a restriction could damage both the economy and the country’s defence capabilities. This year’s planned deficit stands at CZK 310 billion.
Schillerová argues that the main purpose of the legislation is to increase transparency and create room for strategic investment. “The aim of the amendment is to enable strategic investments that will support economic growth. Stifling growth is not the path to healthy public finances,” she said.
The Czech president also criticised a provision allowing the government to increase certain expenditures by up to ten percent in the event of a worsening security situation, without prior approval from lawmakers. Such a decision would require the consent of the State Security Council. Schillerová said the measure was necessary to enable a swift response to unexpected security threats.
The amendment would also allow defence spending to exceed the limits approved by the Chamber of Deputies until 2036. Expenditure above two percent of gross domestic product would not be included in standard budgetary spending frameworks. A similar exemption would apply to strategic infrastructure projects.
Pavel also raised concerns about the position of independent institutions. Under the new rules, the Finance Ministry could gain a stronger role in influencing their financial management through negotiated agreements. He referred to institutions including the Constitutional Court, the Office of the Public Defender of Rights, the Supreme Audit Office, the Office of the President and the National Budget Council.
Lawmakers could return to the vetoed amendment at the end of August. This is the third bill Petr Pavel has returned to the Chamber of Deputies during his presidency.
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