Czech Industry Says Sanctions May Cost Tens of Billions Koruna

Sanctions imposed by the European Union against Russia may cost Czech companies tens of billions koruna, an association of the country’s largest employers said.

About a third of Czech companies that do business in Russia said they may face problems because of sanctions, according to a survey carried out by the Confederation of Industry of the Czech Republic a month ago.

“In terms of macro economy, the current sanctions against Russia won’t have a significant impact on GDP development,” the association’s vice-president Radek Spicar said in an e-mailed press release today. “On the other hand, the Czech companies maybe directly hit by costs of billions or tens of billions of koruna.”

The Czech government focused on preventing sanctions from hurting trade and the new penalties “should have a very limited impact” on the economy, the Industry and Trade Ministry said in a statement today.

Czech exports to Russia declined by 1.2 billion koruna during the first five months of 2014 as Russia’s economic growth slowed and demand fell, the association said. In 2013, the Czechs sold $5.3 billion of goods to Russia, which was its ninth biggest export market, according to data compiled by Bloomberg. Germany was first with $48 billion.

The association also said it understands the need to impose stricter sanctions against Russia to solve the political crisis in Ukraine.

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