The Czech Republic, Its Defence Industry, and Rearmament
Nestled between Germany and Poland, Czechia has long been a relatively marginal player in the international arena. With a small population and a mid-sized economy, landlocked and geographically lacking strategic relevance, Prague had, from the end of the Cold War until very recently, been satisfied with playing far from a central role in NATO and the EU.
While the Czech Republic did, of course, try to assert its interests, it was at times left in the shadow of Poland and Hungary – when EU and NATO interest was pointed at Central and Eastern Europe, it was most directed at Warsaw and Budapest.
Part of the reason for this was that Prague lacked the virulent, albeit both justified and now-vindicated, Russophobia prevalent in Warsaw, while also being, a settled and stable democracy without significant issues related to the rule of law, in contrast to Budapest.
Many were therefore surprised when Czech President, and former Chief of the NATO Military Committee, Petr Pavel announced in February of 2024 that Prague had “found” upwards of 1,000,000 shells for Ukraine on the international market. It was so unexpected and out of character for Prague, that the New York Times article covering the news was initially titled “A Small Ex-Soviet Satellite State Goes Hunting for Arms for Ukraine” (later corrected to “In Central Europe, Czechs Go Hunting for Arms for Ukraine” following vigorous protests).
The two years since the Russian invasion of Ukraine have been years of substantial change for the Czech Republic – both for Prague’s international stance and for her internal politics. Front and centre in this period of change has been a change of attitude – a zeitenwende or, to be more precise, a zlom epochy – in the Czech Republic’s stance on defence and national security matters.
Marked by increased investment in the armed forces and renewed attention towards the development of the country’s defence industrial base, the zlom epochy is more than the tale of how the war in Ukraine changed Czechia’s policy: it is the story of how Prague went from being a defence industrial powerhouse to not being one, and how it seeks to stage a comeback, even though limited.
In the Beginning... the Habsburgs
Incorporated into the Habsburg domains in the 15th century, the Lands of the Bohemian Crown (Bohemia, Moravia, and Silesia, though the latter was later lost to Prussia) were a key centre of proto-industrial economic activity well before the Industrial Revolution.
When industrialisation arrived, Bohemia and Moravia were perfectly positioned to become the Habsburg Empire’s industrial heartland. Factors like their central location in Europe, rich coal deposits, higher human capital, urbanisation, and significant proto-industrial activity (by the early 19th century, 30% of Austrian manufacturing firms were in Bohemia alone) gave them a clear edge.
By 1870, Bohemia, Moravia, and Silesia produced 47% of the Habsburg empire’s manufacturing output (3.1 billion in 1990 GK$), shrinking to 37% by 1910 despite absolute growth to 7.84 billion. In both years, they accounted for over half of Cisleithania’s manufacturing output, with only Lower Austria having higher per capita production.
Industrialisation, coinciding with an era of inter-state competition, saw the defence industry play a significant role in Bohemia and Moravia. This period saw the founding of major steelworks and firms, including the giants of Czechoslovak industry: Škoda Works and TATRA. Škoda, in particular, became the Austro-Hungarian defence sector’s crown jewel, supplying everything from machine guns to naval guns and competing internationally with firms like Krupp.
Safeguarding Independence - the Interwar Years
After World War I, the Lands of the Bohemian Crown under Austria became part of the First Czechoslovak Republic, comprising modern-day Czechia, Slovakia, and Subcarpathian Ukraine.
Czechoslovakia inherited around 70% of the Austro-Hungarian Empire’s industrial capacity, mostly in Bohemia, Moravia, and Slovakia. Building on its strong industrial and defence base, the interwar years saw the expansion of its defence industry, incorporating firms like Meopta, Tesla, Praga, ČKD, and Jihostroj, alongside major players like Aero Vodochody, Avia Motors, and Česká Zbrojovka (CZ).
During this period, ČKD and Škoda armoured vehicles, Aero and Avia aircraft, and ČZ firearms gained global recognition, with the ZB vz. 26 becoming the basis for the BREN LMG. Between 1920 and 1939, Czechoslovakia ranked among the top global arms exporters, including third in small arms and light weapons and sixth in armoured fighting vehicles.
Most exports (Mehrl and Thurner, 2024) went to Central and Eastern Europe, with 51% of light weapons, 51.7% of aircraft, and 53.1% of armoured vehicles sold within the region. The MENA region also became a significant market, accounting for 23.8% of light weapons, 11% of aircraft, and 27% of armoured vehicle exports.
Key buyers included Little Entente allies Yugoslavia (17% of Small Arms and Light Weapons, or SALW, exports) and Romania (20.1%), along with Iran (14%), Turkey (9.4%), Poland (8.6%), and China (7.6%). Interestingly, substantial sales to Poland occurred despite territorial disputes over the Trans-Olza region (known in Polish as Zaolzie and in Czech as Těšínské Slezsko or Těšín Silesia, primarily centred around the town of Těšín/Cieszyn), underlining Prague's pragmatic approach to arms exports.
Under New Management - Prague's Arms Industry under German and Soviet Occupation
Between 1939 and 1945, as Germany stripped modern-day Czechia of the Sudetenland and then turned its remains into a vassal state, the Czech military-industrial complex became vital to the Reich’s war effort.
Despite Germany’s policy toward Czechs remaining aimed at the extermination of the majority and Germanisation of a minority, the defence sector was spared: Tatra produced trucks, ČKD shifted almost entirely to armoured vehicles, Aero and Avia integrated into German aircraft production, and Škoda supplied various military equipment. Enterprises would also often be Germanised, for instance with ČZ Brno becoming Waffenwerke Brunn.
After the war, Czechoslovakia fell under Soviet influence, formalised by the Communist Party coup in 1948. Following the Prague Spring in 1968, Soviet occupation intensified under KSČS leader Gustáv Husák during the normalizace period, lasting into the 1980s. Under Communist rule, defence firms like Škoda, Tatra, Aero, Avia, and ČZ were nationalised, consolidated, and subjected to Soviet-style production plans.
Czechoslovakia’s Cold War defence industry, though prominent, operated under Moscow’s restrictions, limiting fully domestic production. The ČSLA primarily used Soviet equipment or locally adapted Soviet designs, such as the BVP-1 (a BMP-1 variant) and the T-72M tank, licence-built by Slovak firms.
However, some domestic products emerged and gained relative success, like the OT-64 SKOT APC (a Czechoslovak-Polish collaboration), the DANA self-propelled howitzer, and the Aero L-39 light aircraft. Small arms production thrived, with ČZ supplying most weapons, although domestic designs were largely limited to submachine guns (e.g., Sa. and Škorpion series) and handguns.
Meanwhile, despite Czechoslovakia’s status as a Soviet satellite state in all but name, the Czechoslovak arms industry managed to remain competitive in the global arms market, particularly in the Third World.
The main export destinations of the Cold War-era Czechoslovak defence industry shifted compared to the interwar period: from primarily directed towards the rest of Central and Eastern Europe, to the Middle East and North Africa, if we exclude the Soviet Union.
Throughout the Cold War, the Middle East became the uncontested primary destination of Czechoslovak arms exports. Using SIPRI data, it can be estimated that the region came to represent 50.35% of arms exports from Prague during the Cold War, with other Central and Eastern European states (classified here as OESS or Other European Socialist States) accounting for 37.75% of Czechoslovak exports.
Czechoslovakia’s primary buyers in the interwar period had been Jugoslavia, Romania, Iran, Turkey, Poland and China, accounting for 76.8% of Prague’s exports between 1919 and 1939. The Cold War saw greater differentiation of export destinations, with the country’s top six buyers of military equipment coming to represent just about 64% of exports, with the largest buyers now being Egypt (representing 19.1% of exports), Libya (12.64%), Syria (10%), Romania (8.2%), Hungary (7.19%) and East Germany (7%). Jugoslavia remained an important buyer of Czechoslovak military equipment, but fell out of the top 6 export destinations, representing a mere 6.55% of Prague’s export. On the other hand, however, the Cold War also saw increased consolidation of Czechoslovakia’s buyers: whereas, in the interwar period, as many as 43 countries and dependencies purchased equipment from Prague, only 30 did throughout the entirety of the Cold War, based on SIPRI data.
It must once again be noted, that all of these figures exclude the USSR, which alone accounted for approximately three-quarters of Czechoslovak military exports. There are two main reasons for the decision to discount the USSR: for starters, the sheer amount of orders Moscow placed for the Czechoslovak arms industry meant any other country’s share of Czechoslovak exports would be overshadowed, not allowing proper analysis; secondly, Soviet orders fluctuated substantially, leading to great fluctuations of Czechoslovak export numbers, while excluding the USSR from the pictures makes the data more consistent year after year, decade after decade.
Speaking of decades, the geographic distribution of Czechoslovak military exports did not only change from the interwar period to the Cold War – it also changed depending on the decade being analysed.
In the late 40s and the 1950s, as well as in the 1970s, the MENA region represented 62% of Czechoslovak arms exports, while other European socialist states were the second largest recipient, with between 34% and 35% of Czechoslovak exports in those decades.
Interestingly, Czechoslovak exports towards other European socialist states remained stable throughout the Cold War, amounting to more than 600 million TIV in the 1940s and 1950s, between 950 million and 1 billion TIV in both the 1960s and the 1970s, before dropping to 420 million TIV in the 1980s. Exports towards the MENA region, on the other hand, fluctuated quite easily -- from 1.2 billion TIV in the ‘40s and ‘50s to 750 million in the 1960s, then again 1.7 billion TIV in the 1970s and less than 350 million TIV in the 1980s.
The ebbs and flows in Czechoslovak military exports and their geography can be explained by shifting geopolitical dynamics.
During Eastern Bloc economic expansion, with governments capable of investing in defence, Czechoslovakia became a key non-Soviet supplier to the Warsaw Pact and other Socialist states. However, as the Soviet bloc stagnated in the late 1970s and 1980s, with key clients like Jugoslavia, Poland, and Romania facing internal strife or economic woes (or both), exports declined.
Arab-Israeli tensions shaped exports to the Middle East. After the 1948 war, Arab states sought cost-effective arms, with Czechoslovakia playing a role despite Soviet dominance. Arms exports surged during conflicts and waned during rapprochements, such as after the Camp David Accords, when Egypt and Syria ceased purchases, leaving Libya as Prague's main regional customer.
Reflecting the sophistication of Czechslovakia’s arms industry, Prague’s exports throughout the Cold War were dominated by two categories, (light aircraft and armoured fighting vehicles) which consistently represented over 71% of sales, peaking at 98.4% in the late 1940s.
It can also be confidently said that SALW exports also played a major role, despite the lack of quality data. With a strong SALW manufacturing history, Prague leveraged its expertise to seek both influence and hard currency through arms exports, particularly to the non-Soviet Socialist world and Third World nations. As Richterová, Pešta, and Telepneva note, this was part of a broader strategy to gain global influence through military assistance.
By the mid-1980s, Czechoslovakia ranked as the world’s seventh-largest arms exporter (Tůma, 2006). However, the Cold War’s end marked the decline of its defence industry
Rough Sailings - the 1990s
By the end of the Cold War, the Czechoslovak defence industrial base (DIB) operated in two distinct modes depending on location. In the Czech lands, state-controlled enterprises like Česká Zbrojovka (ČZUB), ČZ Brno, Aero, Avia, Škoda, and ČKD Praha dominated. In Slovakia, most armaments production was concentrated in VHJ ZŤS, a large engineering trust. This division stemmed from the Czech lands' established pre-war defence industry and Slovakia’s post-war industrialisation under socialist economic policies, which prioritised heavy industry and metallurgy.
Czech manufacturing focused on advanced products, while Slovakia produced heavy equipment like engines, AFV hulls, and guns. Yudit Kiss (1993) described this as a division of labour, with Slovakia handling bulk production with limited technological complexity, while the Czech lands produced more sophisticated military items. Additionally, defence production in both regions was geographically concentrated. Three districts—Central Slovakia, Southern Moravia, and Central Bohemia—employed 73% of the DIB workforce, reflecting regional specialisation.
The DIB was broadly autarkic, especially in Slovakia, where dual-use industries formed vertically integrated supply lines. In towns like Martin, Dubnica nad Váhom, and Uherský Brod, military production dominated employment. Despite its internal strengths, the DIB relied on exports, given Czechoslovakia’s limited financial resources.
The Cold War’s end, however, led to a sharp decline. The collapse of COMECON and the Warsaw Pact disrupted cross-WTO supply chains and eliminated key markets that had accounted for 84.1% of Czechoslovak weapons exports, including the USSR. Additionally, the end of superpower competition rendered the third world less reliant on former Eastern Bloc arms suppliers.
SIPRI data illustrates this decline. In 1989, Czechoslovakia fulfilled significant orders, including Soviet deliveries of L-39C Albatross aircraft and DANA artillery pieces, and exports to East Germany and Algeria. Between 1985 and 1987, foreign orders totalled 1.14 billion TIV. By 1988–1990, new orders fell drastically to 75.87 million TIV. Although sales rebounded slightly from 1991 to 1993, largely due to Syria’s purchase of second-hand T-72 tanks, the broader trend was one of contraction. Between 1994 and 1996, even with a large volume of orders, exports accounted for only 480 million TIV.
Kiss (1995) agrees and lists several interconnected factors for the post-89 decline in the defence industry of Czechoslovakia. Several factors influenced the decline in military exports: reduced domestic demand, the collapse of the WTO military market, embargoes on partners like Iraq and Libya, domestic pressure to shift away from military production, lost competitiveness abroad, and U.S. pressure to avoid selling arms to states like Iran and Syria.
Without the domestic and WTO market, Czechoslovak defence firms lacked the baseline demand that could support their day-to-day operations and provide feedback on the systems being sold; without these, maintaining competitiveness in foreign markets became prohibitive, a situation made worse by the political pressure, arguably stronger in Czechoslovakia than in other now ex-WTO countries, to demilitarise and shift away from weapons systems and towards civilian production.
In short, all conditions that could lead to the collapse of a country’s defence industrial base were present at the same time.
And Prague’s defence industry did, indeed, collapse, with output in the armament industry (as reported by Kiss 1993 and Smith 1994) decreasing from 29.3bn Czechoslovak crowns in 1987 (slightly less than 1bn 1990 USD, or 2.2 bn in 2024 USD) to 16bn in 1990 (500mn 1990 USD or 1.2bn in 2024 dollars) and then 4bn in 1992 (125mn 1990 USD, 301mn in 2024 dollars) – an 86.4% decline in output in 5 years. The situation would become particularly stark in Slovakia, whose defence industrial base would only be able to produce in 1992 around 7% of what it could produce in 1987.
Czechoslovak defence enterprises, starved of orders and cash, struggled to sustain operations, pay employees, and begin the conversion process promoted by political leaders. The government provided some funding – 3.1bn crowns (97 million 1990 USD) between 1989 and 1992 – but this was insufficient for the scale of the crisis. Outside a few exceptions like Aero Vodochody, Tatra, Škoda, and ČZUB, most of the industry became uncompetitive. Czech firms like ČKD faced bankruptcy and sale to foreign investors, while Slovakia’s VHJ ZŤS was broken up and downsized. At its peak in 1987, the defence sector contributed over 3% of GDP, 10% of industrial output, and employed between 133,000 and 250,000 people (between 1.5% and 2.8% of the workforce), including 30,000 in central Slovakia’s industrial triangle (Kiss, 1993). By 1992, defence-related unemployment reached 5-8% in Czechia and 13-15% in Slovakia (Smith, 1994 and Kiss, 1993), driving support for populist, economically nationalist forces like Vladimír Mečiar’s HZDS – forces that would eventually lead to the end of Czechoslovakia through the velvet divorce. The HZDS won over 50% of votes in former Slovak defence hubs, including an astonishing 57.2% in Považská Bystrica.
As Klaus, the leader of the Czech part of the federation, and Mečiar, leader of the Slovak part, agreed to the velvet divorce by the end of 1992, the end of Czechoslovakia represented a further hit to the defence industrial base of both countries - domestic and foreign demand having long decreased, cross-WTO supply lines having been cut, cross-state domestic supply lines were now also cut.
After a decade of cuts, further reductions were then envisaged by the 1996 army concept. In 1999, Czechia’s accession to NATO altered Prague’s strategic picture - and with it, what was required of what was left of the Czech defence industry going forward.
Troubled Sustainment - the 2000s
As outlined at the end of the previous decade in the 1997 National Defence Strategy, the threats that the newly independent Czech Republic would have to face going forward would no longer be conventional military threats related to direct military confrontation, but rather hybrid ones (described in the document as “new external and internal risks not only of military but, first of all, non-military and mixed character”).
Consequently, the 2000s saw Prague’s approach to the maintenance of its own security change, with more efforts being expended on maintaining Czechia’s position in the international arena (by, among other things, maintaining relatively high levels of participation in NATO missions). After all, as the 1997 NDS foresaw that a new open conflict in Europe would most likely flare up as a result of ethnic and religious tensions in “the eastern and south-eastern areas adjacent to Central Europe”, it was key that Prague take an active role in supporting the growth of the components of peaceful coexistence and development – and participation in NATO efforts was seen as key in this regard.
This marked a clear shift from the Cold War, when Czechoslovakia’s national security strategy relied primarily on Soviet “support” and security guarantees, with most national efforts being aimed at the suppression of domestic dissent on the sustenance of a capable conventional military force in case of direct engagement with NATO forces.
What the 1997 NDS does not represent, however, are the consequences of the full integration of the Czech Republic into the North Atlantic Treaty Organisation – which are, instead, accounted for in the 2002 Military Strategy.
For starters, as the 2002 MS outlines, NATO accession means that “one of the main strategic goals of the security policy of the country has been achieved” – i.e., the positioning of Prague within the community of Western, democratic nations and its integration within a strong defence structure capable of supporting Prague in case of external aggression. Nevertheless, the rise of terrorism as a threat to global security further enhanced, in Prague’s view, the need for cooperation with NATO partners in international anti-terrorism endeavours, necessitating a shift in the overall conception of the armed forces from (still) primarily focused on territorial defence to dedicated to combating more unconventional threats.
For the vast majority of countries in NATO – and outside of it – the 1990s and particularly the 2000s were marked by substantial reductions in military spending as the global strategic picture shifted and the projected role of militaries was to shift from direct inter-state competition towards peace enforcing, peacekeeping, counter-insurgency and other non-conventional modes of engagement.
Czechia was no different, as the 2002 Military Strategy called for a reform based on four key points – professionalisation, modernisation, rationalisation and re-focusing. In short, the Czech Armed Forces (Armáda České Republiky or AČR) would need to complete the transition from a mass force based on national service to a fully professional one and needed to modernise their equipment by phasing out soviet era legacy-equipment and embracing hardware compatible with NATO standards, all the while facing an overall reduction in available resources and comprehensively shifting their mission, as previously mentioned, from territorial defence to out-of-area operations (engagements outside of the country’s geographic region) like peacekeeping and counter-terrorism missions. To achieve all these goals, the Strategy envisaged that spending on defence would have to remain at 2.2% until all objectives had been achieved.
The first point was relatively easy to achieve, with the abolition of mandatory military service coming in 2005 following a gradual reduction in the early 2000s (the number of conscripted personnel was already less than 10,000 in 2003 and barely 1,500 in 2004 – down from 33,000 in 1999). Similarly, the Czech Republic’s capable military was able to partake in NATO-led missions from the get-go – as of 2010, Czech soldiers had taken part or were actively involved in NATO missions in Afghanistan, Albania, Turkey, Bosnia, Croatia, Iraq, Kosovo, Kuwait, Lithuania, North Macedonia, Pakistan and the Sinai Peninsula, with as many as 3,219 servicemen deployed in NATO missions in 2003 alone. Points two and three were, however, more difficult to achieve.
For starters, not only would defence spending (based on NATO data and, when that proved unavailable, SIPRI data) remain below 2.2% of GDP throughout the transition period – that figure would never even be close to being achieved until 2024, with current NATO estimates putting Czech defence spending for the year at 2.1%.
Secondly, the issue this posed was that force modernisation required substantial funds to be allocated for the procurement of equipment for all branches of the military. However, said investment failed to effectively materialise. NATO classifies defence spending based on four categories: personnel (wages, pensions, allowances and compensations for military and civilian defence personnel), equipment (procurement and maintenance of hardware, as well as associated R&D costs), infrastructure (development, construction and maintenance of military installations, bases, etc), and “other” (everything else).
Just as NATO recommends that 2% of GDP be devoted to national defence, it also recommends that countries devote 20% of defence spending to major equipment spending – the explicit objective of which should be to avoid excessive obsolescence. Looking at NATO data on national defence spending, one thing is clear – not only did Prague fail to meet its own targets, but it also failed to meet NATO’s baseline recommendations.
Between 2000 and 2021, Czech spending on procurement never reached NATO’s 20% recommended level, except for 2009. In the three years since Moscow’s 2022 escalation of hostilities against Ukraine, Czech spending on procurement of major military equipment and associated R&D has finally rebounded and been stably above 20%.
It is within this context that the Czech Armed Forces embarked on what, for the meagre means they were provided, was a very ambitious modernisation programme – encompassing both the land forces (Pozemní Síly or PS) and the air force (Vzdušné Síly or VS).
The modernisation programme undertaken by the AČR had multiple objectives, seeking to simultaneously rejuvenate the force’s fleets, improve compatibility and interoperability with other allied forces, and do so in a way that would both allow the force to leverage existing defence industrial capabilities on the one hand, and ensure their sustainment and continued relevance – all within a context characterised by substantial budgetary shortcomings.
To do so, the Czech MoD opted to focus on a strategy marked both by the procurement of advanced foreign equipment (such as the JAS-39 Gripen fighters leased from Sweden in 2005), and by the employment of the country’s Defence Industrial Base to support as many needs as possible. In 2006, the Czech Republic signed a contract to procure 107 Pandur II 8x8 IFVs from GDELS (General Dynamics Europe Land Systems) – the contract included provision for the indigenisation of the vehicles through collaboration with the businesses part of the Czechoslovak Group (CSG, the primary defence industrial conglomerate in the Czech Republic and Slovakia).
Similarly, the modernisation programme for the Czech Republic’s remaining T-72 tanks, which would eventually take the name of T-72M4CZ, was based on extensive collaboration between domestic and foreign industrial players. The new engine was sourced from the UK, the transmission from the US, the fire control system was jointly developed by Czech and Italian partners, the crew protection system by Czech and German businesses, and the new explosive reactive armour (ERA) by Polish and Czech players. The final product was assembled by VOP CZ, a Czech defence manufacturer fully owned by the MoD.
In the meantime, procurement of entirely domestic platforms also continued, especially in two of the Czech arms industry's traditional staples – light attack and trainer aircraft, with the L-159 ALCA (designed, developed and manufactured by Aero Vodochody) procured in 72 exemplars, and SALWs, with the AČR’s supply of said equipment type continuing to be met, for the most part, by domestic manufactures (chief among them ČZUB).
The 2000s were not, however, all sunshine and roses. The consistent failure to meet defence spending and most of all procurement targets led to the undertaking of cost-cutting measures such as the delayed replacement and upgrade of the attack helicopter and BVP-2 IFV (the Czechoslovak version of the Soviet-made BMP-2 IFV) fleet, as well as the abandonment of the targets set out in the 2002 Military Strategy for a 35,000-strong army. As acknowledged by the 2011 White Paper on Defence: “As a consequence of ad hoc budget cuts resulting in postponed investments, non-systemic investments and overpriced contracts, the defence sector has accumulated internal debt […] over the last decade [of] roughly 80 to 90 billion CZK” (between 3.3 and 3.7 billion euros in 2011, or between 4.4 and 5 billion euros at current value). The White Paper went on to state that “the situation […] [was] critical”. Despite the warnings of the 2011 White Paper, little to no action was undertaken, and investment in defence procurement kept declining until 2015 – when it started to rebound.
The Zlom Epochy
In the aftermath of the Russian takeover of Crimea and of Moscow’s 2014 intervention in Ukraine, NATO raised the alarm. At that year’s NATO summit in Wales, Alliance leaders agreed to a non-binding commitment to reach a level of defence spending equal to at least 2% of GDP in the near future. Following the 2008 financial crisis and the 2011 Eurozone sovereign debt crisis, defence spending had fallen in most European NATO member states – with Czechia being no exception. Prague saw its defence spending plummet, from 1.57% in 2006 (0.43% below NATO’s target) to 1.31% in 2009 and eventually a pitiful 0.94% in 2014 – less than half of NATO’s target.
The return of great power competition to the fore, and most of all the return of inter-state tension to Europe after two decades of détente and despite the European political establishment’s best efforts to appease Moscow both after its invasion of Georgia and after the first invasion of Ukraine, led to increases in defence spending across the board throughout the Alliance. The Alliance average, not considering the United States, saw military spending move up from its 2014 low-point of 1.43% to 1.72% in 2020, before reaching 2.02% in 2024; a similar trend occurred in Prague, where defence spending went from 0.94% in 2014 to 1.39% in 2020 and reached 2.1% in 2024.
Most of the increase in defence spending across the alliance has been driven by increased spending on procurement, for two main reasons: the changes that 2014 and 2022 brought in the strategic environment in Europe, and the depletion of equipment stocks owing to support for Ukraine.
For starters, European armed forces had configured themselves over the past 20 years to be able to fight primarily low-intensity conflicts in an asymmetric environment. The return of peer-to-peer or near-peer competition to Europe took most armies by surprise – or, to be more precise, it took the political leadership of the national security apparatuses across the continent by surprise despite the warnings of the defence community.
With itself, inter-state competition brought back the potential for high-intensity warfare to be fought on the continent – a potential that Ukraine had the unwanted privilege of experiencing firsthand. Hence, many European armies realised “all of a sudden” that their ammunition stocks were not deep enough, that their defence industrial base would be unable to keep up with production requirements in the case of a conventional war, and that forces designed to operate in asymmetrical, low-intensity environments would fare poorly in largely symmetrical, high-intensity conflicts. Between mid-2023 and early 2024, reports came out that two of the continent's pre-eminent military powers, Italy and France, had alarmingly short stocks of naval and artillery ammunition, respectively.
Similarly, the Czech government found itself forced to confront the results of two decades worth of under-investment in the defence sector. At the beginning of the war in Ukraine, the country still had not withdrawn its BVP-2 IFVs, still operated Mi-24 and Mi-17 Soviet-era helicopters (even if less than in the late 2000s), and still employed SK12 Kub soviet air defence systems. All of these pieces of equipment are, as of 2024, still in service with the AČR. For context, the 2011 White Paper on Defence foresaw that they would reach the end of their service life by 2015 or between 2015 and 2020 at the latest and that they should be sold as rapidly as possible to free up resources for more investment.
On top of this, other pieces of equipment that had been key in the modernisation of the Czech armed forces in the 2000s had only been leased, notably the JAS-39 Gripens, meaning they could not effectively be relied upon for long-term defence purposes, as the lease required constant renewals.
Recognising the strategic importance of supporting Ukraine, the Fiala government would provide Kyiv upwards of $288 million in military equipment between February 2022 and June 2024, including 62 tanks, 131 IFVs, 16 air defence vehicles, 13 howitzers, 12 multiple rocket launchers, almost 100,000 artillery ammunition and at least five million small arms ammunition (data on which is unavailable after February 2023). While a laudable effort, Czech support for Ukraine also served two secondary purposes (as with many other countries part of NATO’s eastern flank): to simultaneously free up resources tied up in the maintenance of old equipment and to present the political class with the fait accompli that investment in defence was sorely needed.
Ever since, Prague has been on a procurement frenzy that, had Warsaw not thrown everything and the kitchen sink at military procurement over the last two years, would make their Polish neighbours blush, if only for Prague’s ability to consistently rely on its domestic Defence Industrial Base.
Under a programme initially devised in 2019 as part of KVAČR 2030 (Koncepce Výstavby Armády České Republiky 2030 or Czech Armed Forces Development Concept 2030) and then revised in 2024 under KVAČR 2035, the AČR has sought to procure replacements for the T-72M4CZ, BVP-2 and DANA SPG fleets, modernise their MRAP (Mine Resistant Ambush Protected vehicles) and truck fleets, acquire long-term capacity for the air force by replacing the JAS-39 Gripens currently in service, as well as find replacements for its increasingly obsolete helicopter fleet.
On the land side, things proved to be relatively easy. The Czech Republic has procured 42 Leopard 2A4 tanks from Germany to replenish T-72s sent to Ukraine, and has reached an agreement with Berlin for the future procurement of 77 Leopard 2A8s with the possibility of design indigenisation through collaboration between Rheinmetall and the Czech defence industry; additionally, Prague has also reached an agreement with Sweden to purchase as many as 239 CV-90 MkIV IFVs to completely replace the BVPs still in service – this time, with indigenisation already included in the contract. On top of this, contracts were signed with domestic suppliers Tatra Defence Vehicle (TDV) for the supply of 62 TITUS 6x6 infantry mobility vehicles, while French manufacturer Nexter was awarded a contract to supply Prague with 62 CAESAR self-propelled guns, including substantial collaboration with Czech businesses TDV and Retia for the procurement of the chassis and the communications system, respectively.
Talks and preliminary discussions are also currently ongoing with regards to the AČR’s procurement of replacement systems for the force’s ageing self-propelled mortars fleet, with four being the main options being considered – the Polish-designed RAK mortar, the Finnish-designed NEMO, Israeli company Elbit System’s Crossbow, and the unproven Slovak AM-120 design from ZŤS Speciál. Overall, contracts signed for the procurement of land systems between 2022 and 2024 accrue to a total of more than €5 billion. Considering the requirements laid out by the Ministry of Defence concerning the need for new self-propelled mortars, the procurement contracts for these systems could run up to between €200 and €300 million depending on the system picked.
In the air, things are more complicated. The long-term replacement for the JAS-39 Gripen has been found in the F-35A Lightning II, a contract for 24 of which has been signed in 2023 between the Czech MoD and Lockheed Martin. The contract, worth €6.3 billion, includes provisions for defence industrial collaboration, with as many as 13 business and educational institutions from the Czech Republic being tasked with component production, R&D, maintenance and service and repair operations, further bolstering Prague’s defence industrial base. While the procurement of F-35s has been secured relatively easily, the procurement of the helicopters intended to replace Prague’s ageing Soviet-era fleet took five years, with a combination of UH-1 Venom and AH-1Z Vipers being selected in the end – a programme worth over €300 million overall, and which involves substantial work being done by Czech state-owned enterprise LOM PRAHA.
Overall, equipment purchases secured over the last 4 years have represented a disbursement of approximately €11.5 billion – a commitment equal to more than all defence spending undertaken by Prague between 2014 and 2018 (€10.7 billion) and slightly less than all spending considering 2019 as well (up to €13.7 billion). In 2024, according to the government, overall investment in the military (even beyond new equipment) will reach upwards of 47% of defence spending in 2024; according to NATO, it will account for 37.86% of spending for the year. This represents a significant policy shift – a zlom epochy – from a decade-long trend of underinvestment in equipment purchases.
The Zlom Epochy
The epochal shift in Czech defence spending represents a big step for the country and simultaneously is but a piece in the broader realignment of priorities within the North Atlantic alliance. If even countries like Czechia, whose strategic environment is still, despite all, characterised by the presence of friendly neighbours, most of which Prague shares common defence commitments with, is taking steps to address long-established “traditions” of underinvestment, it is clear that the broader strategic picture for the North Atlantic region has shifted significantly.
Nevertheless, issues persist with Czechia’s rearmament, primarily with what appears to be a concern aimed first and foremost at acquiring capabilities as soon as possible, without necessarily considering the longer-term implications of procurement decisions. Take the contract for the procurement of 24 F-35 fighter jets, for instance. While adding the undisputed best widely-available aircraft in the world to the AČR’s arsenal, the government envisages that the introduction of the F-35 will also allow for the retirement of the L-159 ALCA from the fleet – and, as things stand, no domestic replacement is under consideration for the L-159.
Similarly, whereas the contract for the procurement of 239 CV-90 MkIV IFVs includes indigenisation options, the agreement for the procurement of Leopard 2A8s does not, as things currently stand. On top of this, even though domestic options exist that could be procured in the realm of artillery systems, most notably Excalibur Army’s MORANA 155mm SPH, the decision to procure French-designed systems in collaboration with domestic industries appears like a halfway measure taken to prioritise proven systems over potentially other ones that are more challenging or less proven, but also more promising from a defence industrial perspective.
Even if domestic platforms are not being picked for big-ticket items, the Czech industrial base still supplies the vast majority of small arms and light weapons for the AČR, and is capable, as demonstrated by the indigenisation agreements for foreign-sourced equipment, by providing high-quality systems. Systems that have also found substantial, if limited, export success – a success which has allowed some Czech defence businesses to acquire well-established foreign brands, as ČZUB did with Colt and later with Fiocchi.
Prague’s approach is simultaneously cautious as well as, potentially, risky. Whether it will pay off in the longer term remains to be seen, but there’s reason for optimism.
One thing is certain – the old approach has, for now, been defenestrated.
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