A complete and immediate cut-off of Slovak industry from Russian gas and oil would mean an economic collapse, stated President of the Slovak Union of Chemical and Pharmaceutical Industry Roman Karlubík. According to him, factories would close down, thousands of their subcontractors would quit and important commodities would drop out of the market. Slovakia is 85 to 87% dependent on Russia for natural gas and 100% dependent on Russia for oil. Karlubík pointed out that in the case of natural gas there is no quick alternative, while for oil it is partly possible if suppliers and transport capacities can be found. A gradual reduction of dependence on Russia for natural gas is realistic, as indicated by Economy Minister Richard Sulík (SaS), within a timeframe of about five years.
"Countries like Slovakia do not have such resources, the solution is only possible at the EU level, or even with the support of NATO countries, especially the USA," Karlubík stated. He noted that the EU will play a big role in helping states. However, the bloc must take a different approach for coastal countries, which can bring gas and other commodities cheaper from neighbouring continents, than for landlocked states.
He pointed out that the current rise in energy prices was having a major impact on the competitiveness of Slovak industry, far more than in some countries, such as those with a more favourable geographical location or access to the sea. Translating price rises into multiple price increases for customers is no longer even possible in some places. Direct inputs into production in some cases exceed even the increased prices of products and customers are no longer able to accept this. To this must be added additional transport costs (fuel prices).
"Enterprises are significant tax payers, which go into the social system, and when plants and production are shut down, there are also risks for the state and the resulting lack of funds in the state budget. When comparing state aid at home and abroad, Slovakia is lagging behind," said Karlubík.
He added that the EC adopted a temporary crisis framework on 23 March to allow member states to use the flexibility foreseen in state aid rules to support the economy in the context of the Russian invasion of Ukraine.
Source: TASR
