In recent weeks, in connection with the global coronavirus pandemic, there have been rumors that the anticipated economic difficulties should be largely addressed by funds taken from the planned modernization projects of the Czech Army. However, the prevailing opinion now is that the modernization of the Armed Forces of the Czech Republic should continue. This is good news not only for the Army, but also for Czech industry.
After earlier statements that the purchase of new tracked Infantry Fighting Vehicles should be one of the projects for the modernization of the Army, which would fall victim to economic savings, the Government changed its mind. According to the latest statements of Prime Minister Andrej Babiš, the Army's largest modernization projects are to continue. This was previously agreed by members of the Defense Committee and senators. Thus, after many years, there seems to be a consensus across the political scene in support of the renewal of the armed forces' equipment, despite the economic difficulties that are likely to arise.
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In recent decades, every major crisis (floods, economic stagnation, etc.) has always been borne the most by the Army budget, thanks to which the Army is heavily underfunded and the public debt in the field of defense reaches tens to hundreds of billions of crowns. At the same time, defense investments have a multiplier effect, not only strengthening the country's security, but also bringing work for Czech companies. Top know-how also flows to the Czech Republic, thanks to which domestic producers are in contact with the latest world technologies, and thus become more competitive on the international market.
Specifically, in the case of the purchase of new IFVs and other variants of tracked armored vehicles, the Ministry of Defense determined as one of the conditions for the tender a 40% share of Czech companies in the entire contract. That is approximately 20 billion crowns, which is definitely not a negligible amount. These funds are to be returned to the Czech economy, and due to the multiplier effect, it will even be a multiple of the stated amount. It is therefore certainly more effective for the state to support domestic companies by continuing armaments projects such as this, rather than having to provide them with financial support due to the economic problems that a pandemic crisis is likely to bring.
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The money that the state invests in the purchase of products and services from Czech manufacturers of special equipment means a benefit for it in the form of taxes and also employment. Business relations with the state, in turn, provide companies with funds for investment, development and research, as well as references that can help them gain a foothold in foreign markets. The Minister of Defense, Lubomír Metnar, has also repeatedly identified the purchase of Infantry Fighting Vehicles as a priority. The 7th Mechanized Brigade is to be armed with new armoured vehicles. To complete the construction of this unit, the Czech Republic has not only committed itself to NATO allies, but above all to significantly increase the Czech Republic's defenses and contribute to the Czech army finally turning from a black passenger in NATO into a full-fledged partner.