Czech Business Today

The Czech Government has approved the Capital Strengthening of EGAP (Export Guarantee and Insurance Company) for the purpose of insuring export credit risks to Ukraine. Czech business representatives have been calling for such a governmental initiative for a long time. For example, companies from our neighbouring countries, such as Poland, Germany and Slovakia, have had an export insurance programme to Ukraine since last year. The Confederation of Industry of the Czech Republic (SP CR) is therefore pleased that it has been approved and will be launched soon. However, SP CR expect it will be of great interest especially among small and medium-sized enterprises, as it cannot cover large orders.. The maximum coverage for one contract will be EUR 3 million, but SP CR sees demand from companies for insurance in the order of ten times higher.

Radek Špicar, Vice President of the Confederation of Industry, considers the lower hundreds of millions to be an insufficient amount. “Czech companies want to take an active part in the reconstruction of Ukraine, and if they are to succeed, they need comparable conditions to those enjoyed by companies from Poland, Denmark and other EU countries. The Czech Government does not yet realise the scale of this opportunity”. Vice President Špicar described the amount released for export insurance to Ukraine as a pilot project. “The government should give clear and timely assurances to businesses that if the pilot proves successful, they can count on further funding so that its approach does not put them off.”

The interest and involvement of Czech companies in Ukraine is also evident from the participation in the business mission to Ukraine, which the Czech Confederation in cooperation with the Czech Chamber of Commerce, is currently organising. As the Director of the International Relations Section of the Confederation of Industry, Lukáš Martin, confirms, “Czech companies can succeed very well in international competition because they offer quality goods and services at competitive prices. However, if other countries offer better state support to exporters, their performance deteriorates. That is why SP CR are glad that the programme has been approved in cooperation with EGAP and with the support of the Ministry of Industry and Trade and the Ministry of Finance, and companies will be able to use it.”

Source: SPCR.cz

Critical raw materials are crucial for a wide range of strategic sectors, including net zero industry, the digital sector, engineering, aviation as well as defence and the space industry. Even if it is foreseen that the demand for critical raw materials will continue growing significantly in future, the EU remains strongly dependent on their imports and it is often from quasi-monopolistic third-country suppliers (currently, the EU is particularly dependent on China – for example 97 per cent of the EU’s consumption of magnesium and almost all of the EU’s need of heavy rare earth materials come from the PRC).

Our Confederation fully supports the efforts of the European Commission to support domestic extraction of rare earth materials, however, we remain sceptical as regards the proposed speed of strengthening EU’s capacities in this respect due to the lengthy and demanding procedures of current authorisation processes. In several aspects we also find it essential that the proposed Regulation be modified and amended. The primary goal of the new Regulation should be to support companies in order to be able to secure the critical raw materials they need, and to enhance the development of new, alternative materials thus mitigating dependency risks on specific countries.

Source: spcr.cz