Prague Weighs Big Sell-Offs as Havlicek Pushes Investment-First Playbook

Who Is Driving This And Why It Matters

Karel Havlicek, 57, is Babis's point person on business and the economy in the government formed last year, and says the 1980s US mix of lower taxes and a pro-business stance shaped his view of what works. "It was absolutely clear that this economic way," he said, "was the best way." Even after raising pensions and some social handouts, he says the main push now is to unlock investment and accelerate growth. That shift has already blown out the deficit in a country that long prized low debt and fiscal restraint.

What Could Be Sold, When And To Whom

Havlicek said the state is considering offloading between 60% and 80% of explosives maker Explosia, and that ministers could settle on whether to move ahead with sales of stakes in Explosia and airport operator Letiste Praha by early next year. Babis has earlier suggested floating about 40% of the airport company in Prague via an IPO. Interest is not theoretical: Havlicek says 10 of the "most important players" in Europe have kicked the tires on Explosia, and, according to local reports, contenders include France's Eurenco and Colt CZ as well as CSG NV, which is controlled by billionaire Michal Strnad. "We are not definitely convinced that we will do it, but if we will do it via the stock exchange, via an IPO," Havlicek said on Tuesday, adding "from my perspective, it's good to do a decision in this year."

Any privatization proceeds would be used to channel more funds into transport, energy and defense. He gave no details and emphasized the money will not strengthen the structural budget balance.

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The Budget Trade-Off And Political Friction

The investment-first tilt has helped swell the deficit, and Babis's coalition allies are balking. They contend that the 2027 deficit, projected at 389 billion koruna ($18.4 billion) - the nation's second-biggest on record - is excessive, and they aim to shave it down before the plan goes to parliament. Havlicek brushed off the pushback, saying people cannot demand more highways, railways, nuclear reactors and higher defense spending while refusing the borrowing to fund them.

"There is no chance to achieve it without an increasing the debt," he said. Babis, who built his fortune in chemicals and agriculture, returned to power with a Donald Trump-inspired campaign that promised to scrap austerity in favor of more investment.

Euro, Competitiveness And The Global Frame

Plenty of Czech firms want the euro, Havlicek said, but the government is holding the line for now, balancing corporate priorities with household considerations and with preserving monetary and economic stability. He argues the timing is off while Europe loses ground to the US and China. "Europe is not in good condition," he said. "I don't see the reason why right now to be part of the hard core of the European Union if they are losing the competitiveness." He praised the US as a "market-oriented economy," contrasted with what he called Europe's "social-oriented economy," and warned that "China is beating Europe with European weapons."

What to watch if you care about your own money: Prague is weighing sizable state-asset sales, steering the proceeds to transport, energy and defense, and leaning on more borrowing to get big projects built. That mix can change how public money flows at home, while the pause on the euro and the competitiveness drumbeat signal where policy might head next.

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