Inflation, the energy supply, and bankruptcy issues are having an enormous impact on Czech businesses and key sectors, with the government's attention divided, according to Dubanska & Co Partner Barbora Dubanska.
In terms of workload and mandates, Dubanska highlights that there are a lot of ongoing restructuring and insolvency proceedings in the Czech Republic. "Recently, one of the biggest Czech fashion chains, Pietro Filipi, went through insolvency proceedings," she says. "It’s a shame that it happened, as the company used to hire innovative fashion designers and was one of the few Czech fashion production companies."
"Similarly, Czech glass manufacturing companies are facing huge risks due to the high energy prices," Dubanska notes. "Many glass manufacturers, producing both regular and glass art products, have announced that they would terminate their activity over the winter, not being sure if that will last for a few months, or whether they will come back at all." Further, "we also have specialized schools for glass manufacturing, for both mass production and art products," she says, noting that they are facing similar problems. "Considering the uncertainty about energy, these schools are changing their timetables to sustain activity," Dubanska notes. "It is sad for the Czech Republic, as the country is famous for glass production and has famous manufacturers and artists. The current crisis is not affecting only businesses, but art as well."
Additionally, Dubanska says that the crisis has an impact on healthcare – "medicines manufacturing is considered a priority sector now, in terms of energy distribution," she notes. "An increase in energy prices will also have an impact on healthcare and hospital management. Hospitals now have to think twice about where to spend their money, to make sure that they can still supply healthcare to patients."
Dubanska also highlights the potential impact of the draft Regulation for a European Health Data Space, introduced by the EU Commission as part of its transition to a digital economy. "One of the key features, in terms of data flow, could be having healthcare records in an electronic format, accessible for patients on the spot and free of charge," she says. "This would simplify getting healthcare abroad for patients, and also be easier for healthcare providers. At the same time, anonymized and aggregated data could be available for policymakers, scientists, and businesses to undertake research projects, adopt policies, or come up with innovative solutions." Dubanska notes that this is a significant topic on the EU presidency agenda, yet "there is pushback from the conservative side – there are some hospitals in favor of paper forms, as well as people and companies who would keep that anonymized and aggregated healthcare data from being freely available."
"And there are supply chain issues as well," Dubanska adds. "For example, Skoda’s manufacturing plants are suffering from a lack of supplies, such as chips. The production has slowed down but, luckily, there were no layoffs yet," she notes, highlighting that the Czech Republic has "one of the lowest unemployment rates in Europe, however, there are prognoses that we’ll see a surge at some point." In general, Dubanska says that there is a huge push from industry associations, such as the Chamber of Commerce and Confederation of Industry, for the government to be more involved in managing the impact of the crises. "The Czech Presidency of the EU Council is taking government focus away from domestic issues, and that's far from an ideal combination of factors," she notes.