Czech firms could suffer losses of up to 19 billion crowns due to EU sanctions & Russian response
Companies, state institutions and insurance companies have been busy tabulating potential losses for Czech businesses due to EU sanctions as well as restrictive measure taken by Russia.
“On the one hand, you have projects which are automatically affected, which will not be insured because they come directly under the sanctions. But that’s not the only factor complicating matters. You also have the impact on Russian banks, the Russian currency, nervousness or fear on the markets which is enormous. For that reason, no one can really say how the situation in Russia will develop further.”
The estimate covers the period of one year, from September 2014. Potential deals which could fall through are primarily in the area of engineering and parts manufacture, which includes dual-use technologies and software which could be used for both civilian and military purposes. Hana Hikelová again:
“Exports to Russia are insured by EGAP and state support comes primarily in the sectors of energy and engineering. Both areas, in recent years, were extremely successful on the Russian market.”
According to an estimate by the Ministry for Industry and Trade, those sectors alone will lose revenues of around 2.2 billion crowns. The ministry’s spokesman, Filip Matys, confirmed for Czech Radio how sectors were divided based on the sanctions:
“The first sanctions concern weapons, the second limits the export of sensitive technology in the petroleum industry and related fields, the third covers technology which is dual-use, and the last restrictions affect capital markets.”
The Russian response is also impossible ignore. There, sectors in the Czech Republic which are expected to be hard hit are the agriculture and food industries. A ban on the export of foodstuffs into Russia is expected to lead to a loss in revneues between 300 and 350 million crowns by the end of this year alone.