President Pavel Unexpectedly Blocks Amendment to Budget Rules — PM Babiš Accuses Him of Vetoing the Budget

Czech President Petr Pavel has refused to sign a sweeping amendment to the fiscal responsibility law championed by Andrej Babiš's government. The move came as a surprise, since the president has never before intervened in the fundamental pillars of government economic policy.

Pavel did not veto the 2025 budget drafted by Zbyněk Stanjura, despite problems involving tens of billions of crowns in various line items, nor did he veto this year's budget put together by Alena Schillerová, even though its deficit breached the legal limits of fiscal responsibility. In both cases, the president cited the tradition of the head of state staying out of the government's core financial policy decisions.

As far as is known, no Czech president has ever sent a state budget law back to parliament before — the only partial exception was an amendment to the 2022 budget, vetoed by Miloš Zeman that November.

Prime Minister Andrej Babiš reacted with visible emotion: in several public statements, including his traditional Sunday video address, he claimed the president had "vetoed our budget." Formally, however, this is inaccurate — what was vetoed was not the budget itself, but the amendment to the budget rules, without which Babiš and Schillerová would not have been able to draft next year's budget in its current form.

The presidential veto is not absolute — the government's parliamentary majority can override it relatively easily through a repeat vote. Nevertheless, Pavel's move is seen as a substantive intervention in the government's fiscal policy — unprecedented in scale given the president's constitutional powers.

It appears the head of state heeded the advice of his economic advisors, as well as the position of the National Budget Council and the overwhelming majority of independent economists who had criticized the bill. Notably, the same expert community raised equally serious objections to last year's and this year's budgets, yet the president chose not to exercise his veto power then.

One theory holds that budget rules carry significance beyond any single year's budget, and weakening them poses long-term risks that extend well beyond one fiscal year. Still, it remains an open question whether this argument is strong enough to justify expanding the conflict into territory that presidents have historically entered only rarely and with great caution.

It's possible that Pavel's decision is a continuation of a much broader standoff with the government. Relations between the cabinet and the president noticeably deteriorated after this year's budget was signed in March. The initial dispute over Filip Turek's candidacy escalated into a disagreement over attendance at the Turkey summit and ultimately led to a dispute over constitutional powers — and nothing suggests either side is ready to settle their differences.

How much of the president's decision was driven by sound economic reasoning versus a desire to make life difficult for the government remains unclear. This does little to improve the quality of public debate, but, paradoxically, it may actually work in the ruling coalition's favor: amid a state of permanent conflict, the government can dismiss even the president's most well-founded arguments as "activism" or "election campaigning."

If the government pushes this rhetoric hard enough, it risks alienating part of Pavel's support base among coalition voters — effectively laying the groundwork for its own candidate in the next presidential election, even though no such figure is even remotely on the horizon yet. Publicly, Babiš shows reluctance to clash with the president and expresses regret over the prolonged standoff, but in practice, the situation actually suits him rather well — especially since overriding the veto will only require one more vote in parliament.

Around Prague, based on reporting by seznamzpravy.cz