Long known as one of Ukraine’s biggest supporters in Europe, the Czech Republic, with its new populist government, seems to have decided on a different direction. This past week, the government decided to cut funding for its bilateral cooperation program with Ukraine by half, well-informed government sources say, with the official announcement due on 2 February.
The government’s Program Ukraine and other initiatives have covered the MEDEVAC program, for example – which paid for the hospitalization in Czechia of Ukrainians injured during the war, including children – and the expenses of Czech doctors that were posted in Ukraine. The 500-million Czech crown annual allocation (20 million euros) funded many other activities linked to development aid.
The move to halve the financing is the latest for the cabinet of Andrej Babis, which has been following up on its pre-election pledge to radically reduce the outlay of state funds to help Ukraine. Also on the way out is the Transition Promotion program (TRANS), a long-running Foreign Ministry initiative that has funded Czech NGOs that promote democracy and human rights in places such as Ukraine.
All this in spite of the public proclamations by key government officials that they do want to promote closer cooperation with Ukraine and work on common projects, such as learning from Ukraine how to build Czechia’s defense capabilities against drones.
All hope is not lost, however. What is staying in place – besides public support for Ukraine – is the interest and level of trade exchange and business ties, especially when supported by the European Commission and other EU funding schemes. But more needs to be done.
Economic ties between Czechia and Ukraine have successfully continued (albeit in a modified form) despite the Russian-Ukrainian war. Czech investment in Ukraine is long-established and concentrated in defense, transport engineering, agriculture, energy, and infrastructure, with major investors including Czechoslovak Group, Skoda, Agromino, and MND. These companies have helped preserve production capacity and employment in critical sectors in Ukraine. (While the presence of Ukrainian business in Czechia is much more limited, there is a growing footprint of dual-use and defense producers, including joint drone-production ventures.)
That doesn’t mean the trade in goods hasn’t changed much since the launch of the full-scale Russian invasion in 2022. Before the conflict escalated, Ukraine was an important supplier of raw materials and industrial inputs for Czech industry, particularly iron ores and automotive components. The destruction and occupation of industrial regions, combined with disrupted logistics and growing domestic demand, sharply reduced these exports.
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