The roughly two-hour meeting focused mainly on the EU\u2019s 2028\u20132034 multiannual financial framework. Mr Costa wants member states to agree on the budget by the end of this year.<\/p>\n
\u201eFor us, what is crucial is to make sure that the Czech Republic reaches the best possible result,\u201c Mr Babi\u0161 said. He stressed the need to strike a balance between the EU\u2019s new priorities and traditional policies that help less developed economies catch up with the rest of the bloc.<\/p>\n
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Defence yes, cohesion cuts no<\/p>\n Mr Babi\u0161 told Mr Costa that Czechia supports higher investment in security, defence and competitiveness. But this must not come at the expense of cohesion or the Common Agricultural Policy (CAP). \u201eCuts in this area are unacceptable for us.\u201c<\/p>\n The Czech PM also said Czechia does not want the new budget to benefit mainly the bloc\u2019s biggest economies. \u201eOf course, we support investment in security and competitiveness, but it must not be at the cost of other sectors. European states have to stay equal. The new budget must not be at the cost of weaker economies.\u201c<\/p>\n He wants the same principle to apply to new centrally managed programmes, including those targeting competitiveness. Funding must be accessible to all member states, not just the wealthiest and largest. The Czech position comes as the EU looks for money for new priorities without significantly increasing national contributions.<\/p>\n Row over farm money<\/p>\n Mr Babi\u0161\u2019s opposition to farm cuts might also have a personal dimension. Companies belonging to the Agrofert group receive millions of euros each year from the Common Agricultural Policy.<\/p>\n In 2024, the figure was around \u20ac16.6 million<\/a>. It included direct payments and other CAP funding. An analysis of beneficiaries ranked Agrofert among the biggest individual recipients of EU farm money in Czechia.<\/p>\n With @AndrejBabis<\/a> in Prague \ud83c\udde8\ud83c\uddff as I finish up the first week of my #TourdesCapitales<\/a>. <\/p>\n We discussed the EU\u2019s enlargement, competitiveness and our next long-term budget. <\/p>\n Protecting the future of our industries is also a matter of strengthening Europe\u2019s security \u2013 and affordable\u2026 pic.twitter.com\/GfY5SReAO3<\/a><\/p>\n \u2014 Ant\u00f3nio Costa (@eucopresident) August 27, 2026<\/a><\/p>\n Andrej Babi\u0161 founded Agrofert in the 1990s and transferred it to a trust fund after becoming prime minister<\/a>. The European Commission is still examining whether the arrangement adequately addresses his potential conflict of interest.<\/p>\n In June, the Commission also confirmed that its scrutiny covers CAP funding. Czech authorities must report payments linked to Agrofert to the Commission until the conflict-of-interest issue is resolved.<\/p>\n Allowances at \u20ac80 instead of \u20ac30<\/p>\n The competitiveness of European industry, particularly the price of emissions allowances, was another major issue. Mr Babi\u0161 recalled that he had called for an overhaul of the EU ETS as early as September 2021. At the time, he proposed capping the price of an allowance at \u20ac30.<\/p>\n \u201eBack then I said that the ceiling had to be 30 euros. The European Commission predicted that in 2030 we would have 26.50, but now we have 80,\u201c he noted.<\/p>\n Mr Babi\u0161 said high allowance prices had cost Czech industry CZK 159 billion (approx. \u20ac6.6 billion). Europe, he argued, must stop high costs from pushing industrial production outside the EU. \u201eHigh emissions around allowance prices destroy our industry, and Europe has to make sure that industry does not leave Europe.\u201c<\/p>\n He also objected to the proposed distribution of emissions allowance revenues. He wants the money to stay with member states. \u201eWe need to make sure that the revenues from allowances stay in the hands of member states.\u201c He suggested higher customs revenues as one possible source of funding for the EU budget instead.<\/p>\n Costa: New budget must do more with limited money<\/p>\n In Prague, as on previous stops of his Tour des Capitales<\/a>, the Council president stressed that the new budget must reflect Europe\u2019s radically changed circumstances. The EU needs to invest more in defence and security, competitiveness, innovation and strategic resilience. At the same time, he does not want to weaken cohesion or agricultural policy.<\/p>\n The problem is money. Most of the EU budget comes from member-state contributions, and Mr Costa does not want them to rise beyond reasonable limits. New own resources will therefore be crucial to the deal, he said.<\/p>\n \u201eThat is why new own resources will also be a crucial element of the overall package. They will help reducing national contributions and at the same time, to support ambitious investment,\u201c he said.<\/p>\n Mr Costa also repeated his main deadline: member states must reach a deal by the end of this year. The reason is not only political. A delay could put EU programmes at risk.<\/p>\n \u201eIt is essential that we reach an agreement by the end of this year. Why? Because we cannot allow any interruption in European funding to vital projects and policies in 2028.\u201c<\/p>\n Cheap energy as a condition for competitiveness<\/p>\n Mr Costa also picked up on Mr Babi\u0161\u2019s criticism of high energy costs. He described Czechia as one of Europe\u2019s industrial leaders and stressed that affordable energy matters not only to businesses but to European competitiveness as a whole.<\/p>\n The EU must speed up efforts to bring energy costs down while continuing its push to decarbonise, he said. That transition must remain technologically neutral. \u201eNuclear or renewables,\u201c he said.<\/p>\n Protecting European industry is also a matter of security, Mr Costa argued. He linked it to the \u201eOne Europe, One Market\u201c agenda, which aims to complete the single market.<\/p>\n Eastern Europe voices similar concerns<\/p>\n Prague is not the only capital where the Council president has heard calls for the new budget to reflect the costs faced by Europe\u2019s eastern flank. Before visiting Prague, Mr Costa met Latvian Prime Minister Andris Kulbergs in Riga. <\/p>\n Mr Kulbergs pointed to the war in Ukraine\u2019s concrete economic costs for eastern member states. He said the war\u2019s impact had shaved around 1.8 per cent off Latvia\u2019s GDP. The country is also facing higher inflation and interest rates, as well as population outflows from border regions.<\/p>\n Latvia will need \u20ac7 billion over the next seven years, Mr Kulbergs said, including for railways, ports and stronger border protection. Around \u20ac1 billion would go towards protecting the EU\u2019s external border.<\/p>\n Like the Czech PM, he does not want new security needs to automatically crowd out traditional European investment. Riga, for example, remains committed to Rail Baltica but wants to make the project cheaper and streamline it. Similar concerns have also emerged from Latvia\u2019s Baltic neighbours in Vilnius and Tallinn.<\/p>\n Czechia wants its share of the new programmes<\/p>\n Mr Babi\u0161 also highlighted another concern. If the EU shifts more money into centrally managed programmes, it must not flow mainly to the biggest economies. \u201eThe centrally managed programs, for example those supporting competitiveness, must benefit all countries, not only the wealthiest and largest countries.\u201c<\/p>\n His argument is therefore not simply about the size of Czechia\u2019s share of the next budget. Prague also wants a say in how the new European money will be distributed. <\/p>\n Mr Babi\u0161 and Mr Costa also discussed further EU enlargement. The European Council president praised Czech support for Ukraine, Moldova and the Western Balkans. Enlargement, he said, must continue through a fair, transparent and merit-based process.<\/p>\n Ukraine also ties directly into his security argument. Supporting its European perspective is not just a foreign-policy issue, Mr Costa said, but an investment in the EU\u2019s own security and prosperity.<\/p>\n Frugals unite behind deeper budget cuts<\/p>\n Meanwhile, German Chancellor Friedrich Merz brought together<\/a> the EU\u2019s six \u201cfrugal\u201d net contributors in Berlin on Thursday \u2014 Austria, Denmark, Finland, the Netherlands and Sweden. The six agreed on a common position calling for the Commission\u2019s nearly \u20ac2 trillion proposal for 2028\u20132034 budget to be cut by several hundred billion euros.<\/p>\n They also want to redirect spending towards defence, competitiveness, migration and European sovereignty. The group opposes new joint EU borrowing and wants stricter rule-of-law conditions attached to EU funding. It also says EU institutions should handle their workload with existing staff rather than expanding further.<\/p>\n The six countries account for around 40 per cent of the EU\u2019s budget contributions, giving their common front considerable weight. But their call for deep cuts puts them on a collision course with countries that want to protect cohesion and agricultural spending.<\/p>\n Gathering red lines ahead of autumn negotiations<\/p>\n Czechia was the latest stop of the first leg of Mr Costa\u2019s Tour des Capitales which will continue through mid-September. He visits member states to gather their priorities ahead of crucial autumn negotiations. After Slovakia<\/a> and Estonia, he travelled to Lithuania<\/a> and Latvia before arriving in Prague.<\/p>\n Each capital brings its own mix of demands. But money, security and competitiveness keep emerging as common themes. In Prague, Costa received a fairly clear answer: Czechia is ready to support the EU\u2019s new priorities. But it does not want to pay for them by weakening cohesion, agriculture or industry.<\/p>\n Costa remains optimistic nonetheless. \u201eAnd like seven years ago, we will reach a good agreement [on the next long term budget] at the end of this process.\u201c<\/p>\n
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