President Pavel vetoes public finance reform bill, ruling coalition planning to override veto

Czech President Petr Pavel has vetoed a controversial bill that would overhaul the country's public budget rules, the Presidential Office announced on Tuesday.

The legislation will now return to the Chamber of Deputies, which can override the presidential veto with a majority vote.

In explaining his decision, Pavel said the bill would fundamentally change how the current and future governments manage public finances. He argued it would threaten the long-term sustainability of public finances while weakening parliamentary oversight of public spending in favour of the government.

It is the third time Pavel has returned legislation to Parliament and the first time he has exercised the veto since Prime Minister Andrej Babiš's ANO-led government took office.

Finance Minister Alena Schillerová (ANO) said shortly after the announcement that the governing coalition would override the veto. In a post on X, she argued that without the bill next year's state budget deficit would have to be capped at 150 billion crowns, which she said would "devastate" both the economy and the country's defence capabilities. The government has planned a budget deficit of 310 billion crowns for this year.