Russian sanctions: How much is at stake?

Apart from the raising geopolitical tensions that the recent development in Ukraine brought, EU businesses have to deal with the consequences of EU sanctions on Russia and the following Russian sanctions on the EU. As the Czech Republic is historically closely related to Russia, the consequences of these sanctions can be very significant for Czech businesses.

Although the predictions vary of how significant will the losses be, there is a general consensus that they will be substantial. The Ministry of Industry and Trade of the Czech Republic estimates that Czech companies would lose up to 2.5 billion CZK (90 million EUR) and approximately 850 working places would be endangered. Although it is difficult to predict how long the sanctions will be in place, the Confederation of Industry of the Czech Republic predicts that the losses would go from billions up to tens of billions of CZK, as almost one third of Czech companies that are active on Russian market could be directly influenced by the sanctions. In the long-term run, there is a risk that companies would have to back down from the market and their positions would be replaced by their competitors from Asia. In this context, the Czech Chamber of Commerce came up with more positive prospects. According to a survey among their members, the expected loss counts tens of contracts and several hundreds of work places. However, the survey adds that the real losses will be known not earlier than 2015 as the sanctions do not affect contracts from last year.

In reaction to the sanctions the Czech government put in place measures that should help companies penetrate new markets and make up for the potential loss in Russia.; However, this will be a long-term effort. Given the importance of the Russian market, Czech businesses hope for rapid settlement of the situation that would mean business as usual.