Mr. Jaroslav Hanák, President of The Confederation of Industry of the Czech Republic
Can you briefly introduce us to The Confederation of Industry of the Czech Republic?
The Confederation of Industry is the largest and most influential independent employers’ and business umbrella organisation in the Czech Republic representing more than 11,000 companies that employ over 1.3 million people. We are a respected social partner both at the national and European level and a leader of the employers’ representation in the tripartite body, the Council of Economic and Social Agreement of the Czech Republic. Our key role is to defend and advocate the common interests of our members and speak for companies of all sectors and sizes including SMEs.
Our main goal is to promote the economic and social conditions in which businesses operating at the national and EU levels can prosper, create jobs, and stay competitive. We believe that all citizens in the Czech Republic and the EU can benefit from our efforts and the success of our companies.
As a member of the European business community – BusinessEurope, the Confederation participates in several advisory bodies and agencies of the European Commission, contributing to the development of the EU policies and legislative processes. Since 1996 we have been the first of the SVEs unions to be a member of BIAC (Business at OECD) influencing OECD international initiatives. We are proud of our strong presence in Brussels, both through our own office, led by our permanent delegate to BusinessEurope, and within the joint Czech Business Representation to the EU (CEBRE).
What are your priorities for the Czech Presidency?
The priorities we set for CZ PRES earlier this year remain valid, and they are employers’ basic principles and attitudes in key areas. However, the current situation associated with the ongoing Covid pandemics and Russia’s invasion of Ukraine must be approached in different time horizons – from short-term to long-term towards structural reforms. We also find it essential not to allow the current adverse situation to rewind the tape of what we have reached in the EU. Nevertheless, our goals and strategies need to be considered in terms of their clarity, feasibility and loyalty to European grassroots and founding principles.
In the Czech business priorities for the second half of 2022, you will thus find an emphasis on competitiveness, pro-growth and resilience measures, openness, cooperation, and increased flexibility. Peace, legal certainty, and respect for fundamental human rights are essential prerequisites of life in Europe. We see all these factors as a precondition for Europe’s successful economic and social recovery and for becoming even stronger in the future.
For example, one of our priorities is called “a resilient and open Europe”. A critical prerequisite for its achievement is to support an ambitious EU trade policy and effective multilateralism. To get there, we need to promote strategic partnerships with like-minded countries, emphasising transatlantic cooperation. It is necessary to focus, among others, on securing safe international data transmission and collaboration in advanced modern technology.
Could you present the economic area and the perspectives of development? The role of energy, environment, and digitalisation?
The EU economy is facing a challenging period. Whilst some services sectors continue to benefit from reopening of the economy after the pandemics, many industrial sectors have seen output hit by continuing global supply chain disruptions and have been suffering due to rising energy and raw material prices. We will all need to be vigilant to the growth of inflationary expectations, with social partners engaging responsibly in collective bargaining on wages to help ensure that temporary price rises do not give rise to a damaging wage-price spiral.
We need to find a proper balance between controlling inflation and the need to support recovery while avoiding recessive effects. The suspension of the rules of the Stability and Growth Pact in 2023 as a consequence of the increased short-term government spending requirements related to the war in Ukraine must not delay the long-term strengthening of public finances. It remains essential to make the best use of the EU’s Recovery and Resilience facility to drive productive investment and reform. In addition, an ambitious industrial policy is the best way to strengthen European businesses’ innovation and global competitiveness. Improving the business environment is critical to support companies without adding to public debt.
The EU policymakers should strengthen the EU Single Market, removing barriers to trade and investment, particularly in energy, digital, banking and capital markets and should pursue an ambitious trade policy whilst diversifying sources of supply.
To tackle skyrocketing energy prices, we support the Czech Presidency to ensure appropriate financial compensation for businesses, create the right investment conditions for more renewable and low-carbon energy and fuels, besides intensifying the diversification of supply routes and taking a realistic approach to phasing out the dependency on Russian energy sources.
In the green transition and the negotiations on the Fit-for-55 package, the Czech Presidency should ensure that the green transition is economically and socially workable and successfully move the EU towards a more sustainable economy while reinforcing our European competitiveness and global technology innovation leadership.
To strengthen our Single Market and accelerate its digitalisation, the Czech Presidency must pursue the protection of the Single Market freedoms not only in negotiations on the upcoming Single Market Emergency Instrument that will address crisis situations, but in all the proposals setting new requirements for products and services in Europe as well as in the initiatives on data economy, AI and cybersecurity.
Could you give us an idea about the important industrial sector in the Czech Republic and the international collaboration?
Although very ambitious, our goal is to contribute to an economic transformation that the Czech economy must undergo. We need to get rid of a cheap supply-oriented economy to stay globally competitive and catch up with advanced economies.
Constituting around one-third of all Czech exports, the automotive sector is a crucial one. The Czech Republic not only ranks second in the world in car production per capita, but it is also an important supplier of car parts to the German automotive industry.
In the current tense geopolitical context with Russia’s invasion of Ukraine, we support the efforts to strengthen the EU economy’s resilience by building coalitions with like-minded partners, diversifying sources of supply and accelerating ratification of negotiated bilateral free trade agreements.
International success requires attention to employment and social policy as well as workable requirements for companies. Given the tight labour markets with record levels of vacancies and skill shortages, the focus needs to be on labour force and skills shortages. A balanced approach is needed on key files, including platform work and pay transparency. The principles of subsidiarity and proportionality must be respected, as well as national practices and social partners’ autonomy. On top, all ongoing initiatives must fit together, be SME-friendly without overlaps and reduction of resources available to companies to deal with the current crisis. Moreover, the EU rules on due diligence must be effective, workable, and proportionate while providing a true level playing field.
What are the major challenges for Czech Industry in the national and international area in the world of today and tomorrow?
Even in this critical situation – or because of it – we should not forget some of the necessary reforms needed in Europe, which would take us towards dynamic labour markets. A lot must be done to reduce skills mismatches by reskilling, upskilling, or adult education to ensure the sustainable competitiveness of our companies, and smooth green and digital transition.
In the current environment, all social partners on the national and EU levels need to lead a constructive dialogue and deliver on their expected and respected roles. It is not only on the governments but also representatives of the employees, employers, and various non-governmental organisations to orchestrate meaningful actions.
It is important to review the impact of the war in Ukraine, especially the way forward in view of the EU sanctions as a response to Russia’s aggression.
Also important to our industry are the initiatives the EU has launched aimed at restoring a level playing field and countering market distortive practices of our trading partners – the Instrument on Foreign Subsidies, the Anti-Coercion Instrument, and the International Procurement Instrument. They will help us effectively defend ourselves against unfair trading practices. As the Czech Republic is an export-oriented economy, ensuring a level playing field in the world trade will increase export opportunities for our companies
Mr. Jaroslav Hanák, President of The Confederation of Industry of the Czech Republic
