Minister: Banks placing obstacles in way of Czech arms exporters
While Czechia’s arms industry has seen record exports in the last two years, its armaments makers are still facing one major problem, according to the country’s defence minister. Jana Černochová says international banks are making it hard for such firms to acquire loans or make payments.
The Czech minister of defence, Jana Černochová, held talks with representatives of over a dozen of the country’s biggest armaments makers on Monday. She says her officials aim to hold regular meetings with industry leaders, and not just in view of the war in Ukraine.
After the two hours-plus meeting, Ms. Černochová said the arms manufacturers had impressed on her that they were facing one major hurdle – banks.
“They have the best intentions, they have permanent staff, they have agency workers, and for the last two years they have been ready to deliver munitions and other military material to a war-torn country. But we have heard today that the banks are still jamming sticks in their spokes.”
The minister specifically blamed international banks, saying that institutions in other countries were unwilling to help Czech firms set up accounts, acquire loans or make payments.
“Unfortunately, they do not act like this throughout Europe. They act like this toward some companies, toward Czech companies. You have to wonder if it isn’t deliberate, because some of those countries are trying to avoid competition on the European market. And as defence minister, I do not appreciate this.”
For his part, the head of the Defence and Security Industry Association, Jiří Hynek, gave the assembled journalists an example involving one of his organisation’s members.
“They had a long-term contract with a bank. When the bank found out that the Ministry of Defence had designated it a strategic company – and it boosted production almost 10-fold – the bank cancelled its checking account. So the firm had to find a new bank. The first bank said its internal rules barred it from financing arms production.”
Both Mr. Hynek and Ms. Černochová said hurdles lain by international banks were holding back investment – and increased production – in the arms industry in Czechia. And the latter said a solution had to be found.
“If we want to at least partly keep up with what is happening to our east, and to help Ukraine as we should, then we need to try to change things and to achieve a breakthrough in this regard.”
The defence minister said she would discuss the matter with her counterpart at Finance, Zbyněk Stanjura, whose officials were already working on ways to improve matters for Czech arms makers.
Despite these problems, 2022 was a record year for arms exports from Czechia, with around CZK 30 billion in total. Figures for last year are expected to be similar.
While most exports two years ago came from companies’ stores, new production predominated in 2023.
