Increasing defense spending to 3% of GDP represents a fundamental economic and political issue that carries wide-ranging impacts on public finances, the army’s personnel capacities, and the overall defense capability of the Czech Republic. The government plans a gradual increase in the Ministry of Defense budget, referring to the worsening security situation in Europe. However, a clear financing strategy is still missing. The options are limited – the state will have to increase taxes, make significant cuts in other areas, or raise national debt, which could have long-term consequences for economic stability. A fundamental problem remains the personnel issue, as the army has long struggled with a shortage of soldiers, and the existing recruitment measures are not sufficiently effective. Without a clear plan to secure funding and ensure human resources, this step risks being not only unsustainable but also counterproductive to the security of the Czech Republic.

Key takeaways:

• Uncertainties in Financing – Increasing defense spending to 3% of GDP requires tens of billions of crowns more, yet it is not yet clear whether the state will choose to raise taxes, make cuts in other areas, or take on further debt.
• Lack of Soldiers – Even with the current budgetary expenditures, the army is failing to meet its planned personnel targets, which increases the likelihood of a return to compulsory military service.
• A Fundamental Political Decision – The change in defense financing should be the subject of a broader political discussion, as it is a measure with long-term impacts on the economy and society.

Policy brief –Jan Rovenský

The analysis is in PDF under the link below.