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Defense budget 2013: lighter cuts than foreseen

Published : 1 October 2012
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The Czech government approved the Financial Bill 2013 last 26th September. Reaching 42.05 billion crowns (around 1.69 billion euros), the defense budget got off lightly when compared with the 38.8 billion crowns which were the allocation anticipated by Ministry of Finance just before Summer.

Finance Bill 2013 will now be examined by Parliament. If it is voted without any change, the Ministry of Defense will only loose a 3.27% compared with 2012. This is far from NATO recommendations, not really satisfying but at least the Czech Armed Forces could keep more or less their current format.

However, this 2013 budget is also far from the ideal repartition of the various expenses (50% for personnel expenses, 30% for current expenses and 20% for investment). In 2012, the average repartition between the envelopes was the following: 55.9%-31.4%-12.7%; in 2013, the personnel expenses should raise to the detriment of investment with a breakdown of 58%-31.5%-10.5%.

So in order to compensate this 3.27% reduction in its future budget, the Czech Ministry of Defense has chosen to cut its resources for procurement by almost 20%, decision which will be heavily detrimental to the replacement of the aging material.

Currently the majority of the available financial resources are already allocated to undergoing armament programs: leasing of fighters JAS-39C Gripen, armored combat vehicles Pandur II, light armored multirole vehicles IVECO, assault rifles CZ-805… Only a very small share should be dedicated to new acquisitions.

However, a special effort should be done in 2013 in favor of Research and Development expenses: 382.5 million crowns (about 15.3 million euros), that is to say a 1% raise compared with 2012.

So the Czech Defense budget 2013 should be again typical of the financial crisis situation and it will force the Ministry to new structural changes. As said General Pavel, the Czech Chief of Defense Staff, in July 2012: “Even if we will reorganize the armed forces, enormous gaps will remain in the current expenses budget that will not allow us to operate in good conditions”. He also added that staff will face a radical choice: either to limit the missions of the armed forces or to dismiss a part of the personnel.