Minister Černochová: Whether anyone likes it or not, wars are won with weapons

 27. 02. 2024      category: Events
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Problems limiting the development of Czech arms companies were the topic of yesterday's special meeting of Defence Minister Jana Černochová with representatives of the Czech defence industry at the Ministry of Defence, which was attended, among others, by the Chairman of the Defence Industry Section of the Chamber of Commerce Lubomír Kovařík, President of the Defence and Security Industry Association of the Czech Republic (DSIA) Jiří Hynek, National Security Advisor to Prime Minister Petr Fiala Tomáš Pojar and representatives of the Parliament of the Czech Republic, namely Senator Pavel Fischer and MP Karel Krejza. At the subsequent press conference, it was mentioned that armaments companies are still having problems obtaining credit from some banks, which prevents companies from, for example, increasing investments and production capacities. However, there are also difficulties in setting up bank accounts or making current payments abroad.

Foto: Momentka z tiskové konference ministryně obrany a zástupců českého obranného průmyslu | Jan Zilvar / CZ DEFENCE
Picture: Moment from the press conference of the Minister of Defence and representatives of the Czech defence industry | Jan Zilvar / CZ DEFENCE

At a press conference after the meeting, the Minister of Defence said that meetings with representatives of the defence industry are very useful, when there is an opportunity to discuss all the difficulties that this sector of industry has. A big topic, according to Cernochová, is the taxonomy, which results in the problems that companies have when applying for loans, keeping accounts, applying for ordinary payments abroad or with any banking service that takes place on Czech soil. This situation arises mainly with banks that have foreign owners. The Defence and Security Industry Association has developed an internal survey among its members which pinpointed specific problems for arms companies. "It still has not improved. On the contrary. We have fresh cases of companies. There are still obstacles being put in the way of companies in the arms industry by banks doing business in the Czech Republic," the minister said. The problem, she said, also arises in the unequal assessment of similar cases, which brings possible unequal competitive assessment of cases in other EU countries, where they simply favour their companies. "And this is such a serious issue that we as the Czech Republic must say it out loud. We have to call these things what they are. It's not just because the European Union, as part of its taxonomy, calls this business dirty business, but of course there is also a role for creating competition. And that makes me all the more sorry. We should be removing barriers within the European Union, not creating them. It is not possible that our companies often have different conditions than the companies of the country where the bank is headquartered," said Defence Minister Jana Černochová, who also confirmed that she would inform Finance Minister Zbyněk Stanjura about the conclusions of yesterday's meeting. He has already raised this topic during the informal ECOFIN meeting and the Ministry of Finance is preparing certain steps to improve the current situation.

According to Černochová, the importance of these changes will also lead to an improvement in the approach of European states in the framework of aid to Ukraine, which can be heard in the public space for two years. "Arms companies are the key to Ukraine's victory. Whether anyone likes it or not, wars are won with weapons. Let's stop whining, stop feeling sorry for ourselves and start doing something," concluded Jana Černochová.

Foto: Vývoj konfliktu na Ukrajině se dostává do situace, kdy byl pravděpodobně vyčerpán podstatný potenciál ukrajinské armády získat zpět ztracená území. | Shutterstock
Picture: "Whether anyone likes it or not, wars are won with weapons," said Defence Minister Jana Černochová in her speech. | Shutterstock

In his speech, Pavel Fischer, Chairman of the Senate Committee on Foreign Affairs, Defence and Security, appreciated the fact that the meeting was held in such a composition, i.e. with the participation of producers, associations and politicians. "We live in turbulent times, we need to mobilise, we need to arm ourselves and we need to realise that as long as dictators and our adversaries have more weapons than free countries, our sovereignty is at stake," Fischer said. He also added that issues of funding for important defence industry projects are the subject of this week's Foreign Affairs, Defence and Security Committee meeting on Wednesday. "We are ready from the parliamentary level not only to help with important changes to the laws that are being discussed and prepared, but also to help negotiate in our partner committees and in the parliaments of EU and North Atlantic Treaty Organisation countries the necessary synergy so that the Czech Republic has partners in this effort," Senator Fischer added.

Jiří Hynek, President of the Defence and Security Industry Association, pointed out that arms companies face many problems, but those in the banking sector are key. "In 2021, we did a very extensive survey to find out what banking tools manufacturing companies need to operate. And earlier this year we did a bit of a refresh to see how the situation has changed. Despite all the meetings with representatives of commercial banks who assure me that there is no problem in their attitude towards the sector, this survey has shown that this is not the case and there is still discrimination against our industry," Hynek said. As an example, he cited the fact that even a few months after the war in Ukraine broke out, there were banks that refused to accept money from Ukraine for the import of military equipment to Ukraine, arguing that their internal regulations prohibited them from importing military material into the war zone. "If this cannot be changed in a decisive way, if the defence sector does not have access to normal banking instruments, such as making a payment, obtaining bank instruments, obtaining a bank guarantee - it has no chance to develop," the DSIA president stressed in his speech, adding that this is not only about the supply of necessary material to Ukraine, but mainly for its own armed forces.

Lubomír Kovařík, the chairman of the Defence Industry Section of the Chamber of Commerce, then recalled the basic discrepancy between the direction of the European Union and the practical steps it is taking. "Specifically, the EU has identified the defence industry as what is necessary, strategic, important for maintaining defence capability, securing the state. At the same time, the European Investment Bank has so far declared the defence industry as something that is very difficult to finance, which all other banks are subsequently struggling with," Lubomír Kovařík said at the press conference.

When asked how the taxonomy complicates the production of ammunition for the Czech Army, Minister Jana Černochová reiterated that it is precisely the access to funds, where banks sometimes do not allow payments abroad. In this context, the Minister also recalled the internal survey of the DSIA, which contains specific cases where the bank refused to open a bank account, refused to make a payment, etc. Lubomír Kovařík told CZ DEFENCE that in addition to problems with direct payments, there are also limits for some credit issues or limits to some countries outside the EU, including Ukraine.DSIA President Jiří Hynek commented on the potential for Czech companies to set up new arms and ammunition production plants in Ukraine, as recently announced by, for example, Česká zbrojovka, as follows: "Yes, there are plans, but I cannot inform about it for security reasons, because of course we know that production plants in Ukraine are the target of Russian air strikes, Russian attacks. Let the Russian intelligence officers do their job and earn their money, we will not help them," said Jiří Hynek.

 Author: Jan Zilvar

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