Czechs, Slovaks bid to buck EU sanctions drive
(PRAGUE) - More than 20 years after their communist-era federation split in two, the Czech Republic and Slovakia joined forces this week to lobby the EU to soften up new sanctions against Russia over the Ukraine conflict.
Along with Bulgaria and Hungary, leftist governments in Prague and Bratislava insist further sweeping export bans to Russia could hit their fragile economies hard.
Pro-Russian Czech President Milos Zeman, an ex-communist leftist, on Friday went so far as to break ranks with both the EU and NATO who are pointing to a Russian invasion in eastern Ukraine, instead dubbing it "a civil war between two groups of Ukrainian citizens".
Brussels was due to announce new sanctions on Friday in four areas -- financial, arms, dual use materials and technology -- on the heels of a series of bans levelled in late August in response to escalating violence in eastern Ukraine, a conflict that has so far claimed 2,600 lives.
Still recovering from a record-long 18-month recession, the Czech Republic is especially sensitive to sanctions.
It expects growth of 2.9 percent this year after a 0.9-percent contraction in 2013.
The EU and NATO member of 10.5 million people, which has yet to join the eurozone, exported goods worth 125 billion koruna (4.5 billion euros, $5.9 billion) to Russia last year, accounting for five percent of its total exports.
Both Prague and Bratislava insist the EU should allow them to export dual use goods, ones primarily used for civilian purposes but that also have military applications.
Czech Prime Minister Bohuslav Sobotka vowed to protect "exports of dual use goods" including machinery and computer components after Czech industry warned any ban would hit hard.
So far this year Prague has exported 1.7 billion koruna worth of dual use goods to Russia, up from 1.5 billion koruna in 2013, official figures show.
Both the Czech Republic and Slovakia are driven by the car industry and exports primarily to Germany.
- 'Situation evolving' -
Analysts in Prague pointed to domestic politics being behind the outcry over sanctions slapped on Russia.
"Zeman has opposed sanctions from day one. People dependent on trade with Russia financed his election campaign and he's pushing to protect their interests," Josef Mlejnek, a political analyst at Charles University in Prague, told AFP.
He added that a similar lobby might also be responsible for Slovakia's position.
Slovakia's leftist Prime Minister Robert Fico admitted this week he had consulted Sobotka over the sanctions.
"We aren't convinced it's right to ban exports of dual use goods and technologies to civilian users in the Russian federation," he said on Thursday.
Slovakia, a eurozone member of 5.4 million people which exported goods worth 2.5 billion euros to Russia in 2013, also opposes extending financial sanctions against Russian banks.
Sberbank -- Russia's largest lender -- was hit by the first tranche of sanctions, but a new round would also affect its subsidiaries in Slovakia and other EU member states, Fico added.
"Our ambassador (to the EU) was instructed to disagree with a text (sanction proposal) putting the Slovak banking and financial system at considerable risk in relation to the existence of Sberbank's unit in Slovakia," he said.
"Quite frankly, I'm laughing at these sanctions a bit, because we have learnt that all goods flow into the Russian Federation via Belarus and Turkey, a NATO member state," Fico added.
Other analysts said it was too early to gauge the full impact of EU and US sanctions against Russia.
"The situation is evolving," said Luisa Santos, director for international relations at Business Europe, told AFP.
"Companies that may have been ramping up investment or exports to Russia may hold back now given all the problems that surround it."