Conflict with Russia bad news for Czech firms - associations

Russia is an interesting export destination for many Czech firms and the current conflict between Czechia and Russia is not good news for them, Lukas Martin of the Confederation of Industry told CTK.

If the EU decides to tighten sanctions against Russia, this would hurt trade, Chamber of Commerce spokesman Miroslav Diro said. Czech security services have announced they have well-founded suspicions that Russian secret service officers had been involved in the 2014 ammunition depot blast in Vrbetice, southern Moravia. In reaction, Czechia has expelled 18 Russian embassy workers. Moscow retaliated by expelling 20 employees of the Czech embassy.

"The present conflict and relating uncertainty about political development may result mainly in the suspension or postponement of projects," Martin said. "In the long-term, it will probably affect most key industrial sectors in which Czech firms are active in Russia, including the engineering, automotive, energy and chemical industries," he added.

Czech-Russian trade and economic ties had already been hit by the 2014 embargo imposed on Russia by the US and EU.The share of Czech exports to Russia plunged from 3.7 percent in 2013 to 1.9 percent in 2016. They amounted to about Kc150bn in 2012-2013.

Martin does not expect the decline in Czech-Russian trade to be as big as post-2014, when trade between the EU and Russia was paralysed by the sanctions imposed in the wake of Russia's annexation of Crimea and the ruble's subsequent weakening. Over 150 Czech companies have Russian subsidiaries, according to Martin. Czech firms with Russian owners include industrial valves manufacturers MSA and Arako, and engineering company Kovosvit.

Source: ČTK