Czechia among Europe’s strongest economies

What guides us

Seven values by which we judge every decision. Everything else in this document follows from them.

1. Equal opportunity

   Everyone should have the same starting line, regardless of where and to whom they were born: a good school in every region, accessible education and fair rules. The goal is not equal outcomes but equal chances. Equality should be supported, not mandated through quotas.

2. Strong personal responsibility

   Adults decide about their own lives and bear responsibility for their decisions. The state should not act as a guardian; it should create conditions in which good decisions pay off.

3. Social security

   Freedom works only when people have solid ground under their feet. Good, accessible healthcare, a dignified pension and help in hard times are the foundation to build on. Social protection should be reliable and well targeted, not across the board.

4. A free market that actually works

   A free market does not mean the absence of rules. It exists only where its principles are upheld: free competition, no monopolies or cartels, easy entry for new firms and informed consumers. The state is a strong and impartial referee, not a player.

5. Government by experts

   Civil servants decide matters that profoundly affect people’s lives. Those positions therefore belong to the most capable. Great responsibility for one’s own decisions must be matched by above-average pay, so that the best people want to work for the state. Today the word “bureaucrat” carries a pejorative ring, and the state does not work as well as it could because of it. That needs to change: fewer civil servants, but top-class, well paid and personally accountable. Pay should reward results actually delivered, not hours sat out. Government by experts also means taking the analyses of the state’s own audit and advisory bodies seriously and actually acting on them.

6. Security

   Firm anchoring in the European Union and NATO, a capable army and resilience against hybrid threats. Security also includes a sensible degree of self-sufficiency in energy, food and critical technologies.

7. A Czechia that moves forward

   By 2050 Czechia should rank among Europe’s most advanced economies. The way there is education, science, modern infrastructure and a lean digital state in which technology helps but people decide. And sound finances: day-to-day spending covered by revenue, borrowing only for investment in the future.

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Chapter 1

Tax wealth, not work

Labour in Czechia is taxed at one of the highest rates in Europe, and that is the tax most harmful to growth. The tax burden should therefore shift from labour to property, the consumption of harmful goods and excessive profits. From this point of view, abolishing the “super-gross wage” in 2021 was the right step, because it lowered the tax on labour. The mistake was that it was not paid for: public budgets lose roughly CZK 100 billion a year as a result11. The lower tax on labour should be kept, but honestly paid for by shifting the burden to property and consumption.

1. Lower social contributions on low and middle wages, and fairly progressive income taxation.
2. A significantly lower ceiling for the flat-rate tax regime and fewer advantages for high-earning self-employed people compared with employees.
3. Property tax should be higher and linked to property value. The revenue should stay with municipalities.
4. We propose higher taxation of investment property. Owner-occupied housing would remain protected.
5. Restore taxation of gains from the sale of real estate regardless of how long it was held. Owner-occupied housing would remain exempt and the purchase price would be adjusted for inflation.
6. We recommend a low inheritance and gift tax with a high tax-free threshold. Family houses and flats would remain exempt and family businesses could spread the tax over time. The aim is to tax large inheritances, not grandma’s flat.
7. Electronic sales records (EET) should be kept. Stable rules and a level playing field matter more than political tug-of-war.
8. We propose abolishing the holding-period exemption on capital gains and replacing it with a much higher annual tax-free allowance. Ordinary investors would not have to deal with tax; large gains would be taxed.
9. An exit tax for wealthy individuals: anyone who moved abroad before selling would pay tax on the unrealised gain. At the same time, the option to defer taxes through holding structures should be closed.
10. Czechia should introduce a tax-advantaged investment account for investing in EU companies (modelled on the French PEA), so that European savings stay in Europe.
11. Stricter transfer-pricing rules and active support for a common EU approach should prevent subsidiaries from shifting profits abroad.
12. Sector-specific taxes only in exceptional situations (war, energy crisis), always with rules set in advance and a fixed end date.
13. Higher excise duties on alcohol (including still wine) and tobacco. Excise duty on motor fuels should not be raised.
14. A reduced VAT rate on basic foodstuffs, the standard rate on other goods and services.

Chapter 2

Transport: build fast and at scale

Without fast connections between its cities and to neighbouring countries, Czechia will not break away from Europe’s periphery. Money must be concentrated where it has the greatest effect.

1. The priority is a high-speed rail network connected to our neighbours, above all Poland (Wrocław, Katowice), Germany and Austria. Little-used local railway lines should be replaced by good, frequent bus services.
2. Nearby regional cities should be brought close enough to Prague to allow daily commuting. The priority is Pilsen within 30 minutes. This would widen the Prague labour market and ease pressure on Prague housing prices, because good housing within reach of the capital would also exist outside it.
3. Key linear infrastructure projects (e.g. the northern section of the Prague Ring Road) should get an accelerated and simplified permitting regime.
4. Diverting car traffic from city centres, with exemptions for taxis, deliveries and shared cars.
5. Prague and other large cities need intelligent traffic management: a network of junctions controlled in real time according to actual traffic, with priority for public transport and emergency services. Today’s few dozen “smart traffic lights” are not enough. Shorter traffic jams mean savings of time and fuel worth billions of crowns a year, and are among the cheapest transport investments with the fastest payback.
6. We propose raising tolls for freight transport so that lorries pay the real cost of road maintenance.

Chapter 3

Domestic, clean and stable energy

Every crown spent on imported gas and oil is a crown that leaves Czechia. Energy independence is both an economic and a security issue.

1. Rapid expansion of solar and wind power, including storage and modern grids.
2. Continued construction of large nuclear units and preparation of small modular reactors (SMRs).
3. Support for innovation in energy-intensive industry, so that it produces more while consuming less.
4. A strong Energy Regulatory Office with tighter supervision of suppliers, so that a collapse like Bohemia Energy’s cannot happen again.
5. A measurable energy self-sufficiency target: today Czechia imports almost all of its oil and most of its natural gas, and total import dependence reaches 39.5%23. Oil and gas make up roughly 38% of primary energy sources24. By 2050 the share of imported fossil fuels should fall below 10%, thanks to the electrification of transport and heating, domestic zero-emission electricity and biomethane.

Chapter 4

A fair market and strong consumers

A free market works only when the rules are clear and enforceable. That applies doubly to the largest players.

1. Greater powers and higher fines for the Office for the Protection of Competition and the Czech Trade Inspection Authority; stricter oversight of large retail chains.
2. A ban on loyalty cards that condition the price, and on dual pricing in food retail.
3. Stricter supervision of non-bank lenders and tougher penalties for predatory lending.

Chapter 5

Pensions that survive demographics

A pay-as-you-go system alone cannot withstand population ageing. A strong funded pillar must therefore be built gradually, at a pace the budget can bear.

1. A gradual phase-in of a funded pillar. The goal is that people starting work today will get roughly half of their pension from the pay-as-you-go system and half from their own savings.
2. The retirement age should be linked to life expectancy. The transition would be financed by raising the retirement age and by property tax revenue, not by new debt.
3. The savings should be the private property of each citizen, held in their own account and protected by constitutional law. No future government could nationalise them or use them for other purposes.
4. The pillar would be run by an independent public manager modelled on Norway’s sovereign fund. Its management would be appointed by the Czech National Bank, not by the government.
5. Investments should be broadly diversified with an emphasis on Europe, and a meaningful part should go into the Czech and Central European economy. The state would guarantee a maximum annual loss.
6. Pensions indexed to real wage growth, not just inflation, so that pensioners share in the country’s growth.

Chapter 6

Independent institutions, a strong Central Europe in a strong EU

Independent institutions are democracy’s safeguard. A united Europe is the only way to hold its own alongside the US and China, and Central Europe must have a strong voice within it.

1. A strategic partnership with Poland, the fastest-growing large economy in the EU: shared transport, energy and defence infrastructure.
2. A joint approach by Central European states in Brussels when negotiating the EU budget, cohesion policy and climate rules. Active participation in the Three Seas Initiative.
3. Preserving the high degree of independence of the Czech National Bank.
4. Public service media funded by licence fees, so that they do not depend on the government or the state budget.
5. Active support for a single European capital market, so that European savings finance European companies rather than American ones.
6. We recommend gradually introducing English as a second official language alongside Czech. First, all state services and digital services would also be available in English. Laws would have an official English version. Commercial disputes could be conducted in English before specialised courts, as the Netherlands and Germany already allow. Overcoming the language barrier would attract investment and skilled people and open Czechia to the world, as it did for Ireland and Singapore. Czech remains the language of the state and of our culture.
7. The koruna should remain an instrument of monetary sovereignty. The question of the euro should be reassessed regularly and openly in light of economic data.

Chapter 7

Defence and security

Peace must be defended. Investment in defence is also investment in Czech industry and technology.

1. A gradual increase of the defence budget to 3% of GDP, with an emphasis on efficient procurement and the domestic defence industry.
2. Support for joint European defence projects that would reduce dependence on the US.
3. Close cooperation with the Ukrainian army, which today has the greatest know-how in modern unconventional warfare (drones, electronic warfare).

Chapter 8

Democracy and an accountable state

Voting should be easy. Those who decide public matters are accountable for their decisions. And those who work for the state should be rewarded for real benefit to people, not for the number of stamps or their superior’s favour.

1. Electronic voting must be approached with caution. It should first be piloted in municipal elections in selected cities, with an independent security audit, open source code and a verifiable paper record of every vote. Any further roll-out would be decided only on the basis of the pilot’s results.
2. An open and secure electronic system would open the way to more direct democracy. Local referendums are expensive and cumbersome today, and so are held only rarely. Czechia has no general legal framework for a national referendum at all. With verified digital voting, people could weigh in on important questions more often, more cheaply and more conveniently.
3. Postal voting for all voters.
4. High salaries for politicians and civil servants, balanced by real personal liability for damage and bad decisions.
5. Today, pay in the civil service is determined mainly by years of service. Yet seniority says little about the quality of work. We propose to change this: performance pay tied to measurable results of work, not to a superior’s subjective assessment, could even exceed the base salary. An experienced or a junior employee who achieves excellent results would then earn more than someone who just serves out the years.
6. Performance pay requires well-designed metrics. For each profession, indicators must be found that capture the real benefit to society. For traffic police, this should be the trend in the number of accidents on the assigned stretch, not the number of fines. For municipal police, the trend in calls to the emergency line in their district. What should always be measured is the change from the baseline, not absolute numbers: a police officer in a problem area where the situation is improving is doing good work even if the numbers there stay higher than elsewhere. For government offices: the speed and quality of handling cases, citizen satisfaction and the number of decisions overturned on appeal.
7. The indicators should be designed by an independent team of experts. They should first be piloted and then regularly evaluated and adjusted, so that they do not lead to chasing numbers instead of doing good work. Where the result depends on a whole team, the whole team should be rewarded.
8. A statutory minimum of internal democracy in political parties and movements: a membership base, elected bodies, transparent decision-making.
9. The findings and recommendations of independent audit and advisory institutions, such as the Supreme Audit Office, the Czech Fiscal Council or the Government’s National Economic Council, should not end up in a drawer. We propose a “comply or explain” principle: the government would have to respond publicly to every finding and recommendation within a set deadline, either with a remedial plan with deadlines or with a justification of why it does not accept it. Implementation would be tracked publicly and debated once a year in the Chamber of Deputies.

Chapter 9

Strong regions, functional municipalities

More than 6,000 municipalities is a luxury Czechia cannot afford. Small municipalities cannot cope with their administrative agenda, and people are leaving the regions.

1. Substantial merging of municipalities into units capable of administering their territory professionally.
2. Incentives for investors in structurally disadvantaged and excluded regions, so that people do not have to leave small towns to find work.

Chapter 10

Managed migration and integration

Czechia needs workers. But migration must be managed and have clear rules.

1. Priority should be given to migration from culturally close societies.
2. An emphasis on full integration: language, work, rules. Newcomers should receive help at the start.
3. The rules and values of Czech society apply to everyone. Newcomers adapt to them, not the other way round.

Chapter 11

A free and responsible society

Adults have the right to decide about their own lives. The state should protect, not act as a guardian.

1. Legalisation of cannabis and a regulated cannabis market.
2. Introduction of euthanasia with strict safeguards, and preservation of the right to abortion.
3. Thorough separation of church and state.
4. Support for equal opportunity, but without mandated quotas.
5. Mental health as a priority, including the impact of digitalisation and social media on children and society.
6. An active response to demographic change and an ageing society.
7. An age limit of 80 for holding the highest public offices.

Chapter 12

Education and research

The economy of 2050 will be built on knowledge, not cheap labour. The rise of artificial intelligence is also changing the very nature of learning: a school that mainly teaches people to repeat information is losing its purpose. Czechia needs a fundamental transformation of its schools, including curricula.

1. New framework curricula built on critical thinking, mathematics, languages and working with technology, including AI.
2. Core competences, meaning reading comprehension, writing, arithmetic and argumentation, should be tested directly in class, on paper and without technology.
3. Homework in its current form is losing its point in the age of AI. It should be replaced by more demanding projects that assume the use of AI and teach students to use it critically and purposefully.
4. English from the first year of school, and gradually teaching selected subjects in English, so that every graduate has a working command of English.
5. Teaching as a prestigious and well-paid profession. Teachers need continuous support and training to manage the transformation of schools.
6. Stable, performance-based research funding, links between universities and companies, and support for new technology start-ups.

Chapter 13

Public artificial intelligence

The state once built a network of public libraries so that everyone had access to knowledge. Today artificial intelligence is taking over that role. The state should not merely regulate it and wait to see what foreign companies offer. Our vision is a state that is an active player, providing citizens with reliable AI as a public service.

1. We propose establishing a National Office for Artificial Intelligence. Its task would not be to restrict AI, but to actively develop and operate models for citizens, schools and public administration.
2. Public AI would be available to every citizen through their bank ID. The state would be its operator and the guarantor of a verified knowledge base: laws, administrative procedures, public data and the Czech cultural and scientific heritage.
3. User data must stay in Czechia and the EU and must not be used to monitor citizens. Its operation would be overseen by an independent body.
4. The office would cooperate with Czech universities and European partners and use European computing capacity.
5. AI assists, people decide. No state decision about a person may be issued by a machine without a human signature.

Chapter 14

Affordable housing

Housing in Czechia is among the least affordable in Europe. Prices are rising faster than wages because building is slow and scarce, and flats are also a popular investment. The solution must act on both sides of the market: more new flats, less speculative demand, and the reach of large cities extended by fast transport.

1. Fast building permits: a fully digital permitting procedure with fixed deadlines. If the authority does not decide in time, approval is deemed granted.
2. An end to endless reviews, following Poland’s example: a building authority’s decision could be appealed only once, and the appeal body would have to decide the matter itself instead of repeatedly sending it back for reconsideration.
3. Expert, professional building authorities. Today there are more than seven hundred of them, and many have one or two officials who cannot have expertise in every type of building. We propose a smaller number of larger authorities with specialists in individual building types and with salaries that attract experienced professionals.
4. Municipalities should actively designate land for housing and densification, especially around rail stops, and give priority to brownfields.
5. A higher property tax on undeveloped plots that the zoning plan designates for development. Anyone who holds a building plot for years without building on it, only waiting for its price to rise, takes away space for new homes from society. The rate would increase with the time the plot remains undeveloped, except where construction is blocked by the authorities. The revenue is part of the property tax reform in Table 1.
6. New construction should pay off for municipalities. Property tax revenue stays with municipalities (point 1.3), and in addition a municipality would receive a contribution for every newly completed flat in its territory.
7. Fewer unnecessary regulations: abolishing mandatory parking spaces for flats within reach of good public transport, unifying and simplifying technical standards, and supporting industrial and modular construction.
8. Municipalities and the state should build affordable rental and cooperative housing, financed by long-term loans, for example from the European Investment Bank, through the State Investment Support Fund. They would be repaid from rents, not taxes.
9. On the demand side: higher taxation of investment flats and long-term vacant flats, and taxation of gains from their sale (points 1.4 and 1.5). A flat should primarily be a home, not just a safe place to park money.
10. Municipalities should be able to regulate short-term rentals where they push out ordinary tenants.
11. Commuting as a solution to the housing crisis: fast rail and good suburban transport (points 2.1 and 2.2) will extend the housing market far beyond the boundaries of the big cities. Someone who can get from Pilsen to Prague in 30 minutes does not have to live in Prague.

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The rules the package rests on

1. No measure without funding. The package as a whole must improve the balance relative to the baseline every year. Spending grows only as fast as verified revenue and savings.
2. Tax neutrality for labour. Contributions on labour are cut only by as much as new property taxes demonstrably bring in.
3. Defence to 3% of GDP gradually, at a pace covered by the package’s revenue and savings.
4. The funded pillar only from the proceeds of growth. Redirecting contributions to the funded pillar will start once the deficit falls below 2% of GDP, and will pause whenever the deficit exceeds it again.
5. The golden rule. Day-to-day spending must be covered by revenue. A deficit is acceptable only for investment, and what counts as investment is decided by the Czech Fiscal Council, not the government. Debt must stay permanently below 50% of GDP.
6. Independent verification. All estimates will be continuously recalculated with independent economists and published, calculations included.

Indicator	Today	Goal for 2050
GDP per capita (EU average = 100)	92.5 (2025)	around 115, on a par with today’s Germany (115) and close to Austria (118); 105 under the status quo
Median wage in today’s prices	roughly CZK 42,000	around CZK 72,000; CZK 66,000 under the status quo
General government balance	−4.0% of GDP (2027, deficit of CZK 386 billion)	around −2% of GDP, for investment only; −8% of GDP under the status quo
Public debt	44% of GDP	permanently below 50% of GDP; over 100% of GDP under the status quo
Tax on labour at the average wage	40.9% (OECD 34.9%)	below the OECD average
Property tax	0.3% of GDP	around 1% of GDP
Public research spending	0.65% of GDP	0.85% of GDP or more
Pension from own savings	voluntary saving only	roughly half of the pension for today’s graduates
High-speed rail	no line in operation	Pilsen–Prague within 30 minutes; Prague, Brno and Ostrava connected to neighbouring metropolises
Imported fossil fuels (oil and gas) in primary energy sources	roughly 38% (2022)24	below 10%
Total energy import dependence	39.5% (2024)23	below 20%
The state online	some services	all services digital, a smaller and better-paid civil service

Tax on labour: Ministry of Finance based on OECD Taxing Wages, single employee on the average wage, 202421. Property tax: IMF 20268. Research: Czech Statistical Office 202414.

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