28/11/2025 |Articles are machine translated
Karel Havlíček, likely Minister of Industry and Trade. | Photo: MPO
Instead of high incentives, a much more attractive business environment, competitive energy prices, reasonable tax regulations, a smart depreciation policy or better evaluation of research and development. Unification of criteria for strategic investments. Large industrial zones only where there is high unemployment. CzechTrade and CzechInvest under one management. These are some of the plans of Karel Havlíček, the likely Minister of Industry and Trade, to stimulate investment.
Some investors complain that the system for allocating investment incentives in the Czech Republic is not sufficiently transparent and the decision-making process takes a very long time. There is now an amendment to the regulation in the interdepartmental procedure that could change this. What is your position on incentives?
I have a problem with one thing, and that is that in the last two or three years, support has been concentrated to a significant extent in a few projects. A typical example is the company onsemi, which can receive support in the amount of around 12 billion crowns for a forty-five billion investment, which to a large extent breaks up the entire environment, because then you no longer have the funds for anything at all.
I have no doubt that onsemi, the chip manufacturer, is a great company from a development perspective. It operates in the Czech Republic, it is expanding, and that is good. On the other hand, we have tens of thousands and perhaps hundreds of thousands of other entities here that will not receive anything at all.
However, if the American parent company had not been promised this high incentive, the company might not have expanded in the Czech Republic.
I understand that we will not attract some investors without incentives. But it is important, first of all, to create an environment here that will be attractive with its energy costs, sufficient labor force, and a friendly tax environment. But we have created a de facto uncompetitive environment here, we have some of the highest energy prices, we are raising taxes – and then we overpay investors with high support so that they are willing to make an investment.
Our economic strategy is strongly pro-investment. We want to stimulate the private sector, both large and small companies, both Czech and foreign, we do not want to differentiate in this. The only thing we want is for those who receive an incentive here to not only employ people and pay taxes, but also to continue to redistribute profits here. I do not want to watch the companies we have supported pay huge dividends to their parent companies.
What kind of investments do you want to attract to the Czech Republic, and what should receive support? What do you consider a strategic investment?
Of course, it is important to unify the rules of what is and what is not a strategic investment. The criteria can be the product itself, added value, impact on employment, but also strengthening the resilience or independence of the Czech Republic. A strategic investment can be in the field of semiconductors, in the field of energy, but also in the field of mining.
Right now, there is a discussion about the mining and processing of lithium at the Cínovec deposit. In my opinion, this is also a strategic investment and the state should participate in it. ČEZ is already quite far along in this. I am in contact with them and I see it as very likely that mining will begin in the next three to four years.
Recently, there has been repeated talk about the possibility that a gigafactory, a large factory specialized in the production of battery cells for electric vehicles, could be built in the Czech Republic. Are the conditions for this? A suitable location, enough labor? In your opinion, is the Czech Republic generally attractive to such investors?
The Czech Republic is still considered a country not only with an industrial tradition, but also with industrial potential. Czech secondary and especially higher technical schools are at a very decent level. Note that there is still a relatively large number of American hi-tech companies here that are oriented towards high added value. These companies did not come because of the price of labor, but because of its quality. Hardworking and educated people are a great asset.
The location of the Czech Republic is definitely not bad. We are in the center of Europe, we can serve a number of other markets from here.
However, this is of course offset by aspects that have put us at a great disadvantage in recent years, especially the high price of energy. Look at what is happening in neighboring countries. Germany has decided to support energy-intensive operations with low energy prices. We will be at double the price against them.
Some people shout at me that supporting the price of energy is not economically correct, that this will increase the budget deficit. But few people realize that the accounting approach that the current (Fial’s – ed.) government has set here is deadly. We want to achieve fair energy prices, even if it will partly come at the expense of the state budget. There is no such thing as an accounting perspective, we have to look at what we can lose in the future. If we don’t do this, companies will leave, they won’t employ, they won’t invest – and that’s already happening today. The economic benefit from such support can be significantly greater than the support itself.
Let’s go back to strategic investments. So if an investor is considering placing a gigafactory here, are there suitable locations prepared for it in the Czech Republic?
There are smaller zones here. As for large zones for gigafactories, say 200 hectares, of course there are not many of them – but on the other hand, there are not that many investors who would need such a large location.
Today we have the State Investment and Development Company (SIRS), which is trying to prepare such zones. It is currently working on three projects. One of them is located in Cheb, where it looks like an interesting investor could come. Then there is still the open question of the gigafactory, which the Koreans are interested in building – in this context, there is talk of a location in northern Moravia. But there is still a long way to go before any agreement is reached there. It is not just a matter of a suitable location, but also of the product itself. Gigafactories are linked to electric cars, and they are not selling as well in Europe as expected. So the Koreans are logically waiting to see how the electric car market develops, and then we will see.
Another interested party in the gigafactory is China’s Gotion, which this year began construction of a gigafactory in Slovakia.
What are we missing if we don’t have such a large factory here?
Between us, the gigafactory is not a brilliant investment. It is essentially a large assembly plant, it does not create any extra large added value.
I consider it complete nonsense that someone came up with the idea of building a gigafactory for Volkswagen in Líny near Pilsen. I ignore the fact that the space belonged to the army, but the problem is that a large factory there would suck the rest of the people out of the labor market for Czech companies. Unemployment is already extremely low there. Isn’t it better for potential workers to stay in smaller and medium-sized companies and support the existing domestic industry? Here, a foreign investor would receive ten billion for his own investment and about eight more for land. I also negotiated with Volkswagen, I had nothing against the investment itself, but I had clear requirements, especially for the location.
In my opinion, it is not necessary to have such an investment here if it should be in a place with low unemployment, where it would actually harm domestic companies. I was in favor of investing in, for example, Northern Bohemia or the Karlovy Vary region, that would help the region, and then the state would contribute something. That would be a win-win.
Should a special state joint-stock company ensure the preparation of zones for investors? In your opinion, has SIRS proven itself?
Whenever a state entity is created that competes with private companies, it arouses a lot of emotions. Logically, CzechInvest should do all this, it was destined for that. But CzechInvest cannot buy up land, SIRS can. We’ll see how to proceed with it.
Do you have any more specific ideas?
I want to merge CzechTrade with CzechInvest. During our previous government, I had these institutions move into one building and it works great. But that’s just a logistical matter, now one institution should be created that will have a Trade and Invest division. Invest should have two legs, supporting investments, whether foreign or domestic entities, from searching for opportunities to processing offers and possibly incentives to monitoring how they are doing here. The second leg should be start-up, but executive. The state can create the methodology, but Invest must translate it all into an applied form.
I assume that the institution should have one management and the goal is to save money.
Of course, this will save some money, but my main promise from this is that this institution will be more proactive and efficient. We have to look at the latest trends in the world.
During Petr Fiala’s government, there was a Government Committee for Strategic Investments. Will Andrej Babiš’s government also use a similar body?
I am generally skeptical of various government working groups, committees and commissions. There is a tripartite structure here, where business, i.e. employers, the state and employee representatives meet, and that is key for me. We also have NERV, but in my opinion it does not function as an advisory body at all. It is a kind of analytical unit that occasionally makes some suggestions, but the government does not follow them anyway. Although there are certainly a number of capable people there who would be good to listen to.
The Committee for Strategic Investments – I do not know if there needs to be a committee for that. We must move from words to actions, and I have the feeling that all these committees are just a lot of words and few actions are being followed through.
According to my information, the Government Committee for Strategic Investments clearly prioritized the development of high-speed lines (VRT) in the Czech Republic. Do you think it is a priority?
The Ministry of Transport has a feasibility study in progress for this, and I think it is doing a good job. I would just like to dampen the emotions around this: we will not have everything we dream of here. This country needs to wake up. We want to have several more nuclear power plant units here, small modular reactors, F35, VRT. All of this costs hundreds of billions of crowns. How will it be paid for?
As for building VRT, it is not easy at all, it involves entering regions in a dramatic way, where the municipalities are often fundamentally opposed. So let’s be reasonable, let’s make a basic backbone network, Dresden, Ústí nad Labem, Prague, Brno, Břeclav, Ostrava, that’s already under development, but the other branches are not absolutely necessary. We are not a big country like France or Spain, where such lines make sense.
Do we need to spend more money on research and development in the Czech Republic? Should another new support program be created?
Research itself concentrates some 46 billion crowns a year of government spending, which is allocated to individual chapters. From my point of view, it is very fragmented, with the four largest recipients of state resources being the Academy of Sciences, the Ministry of Education, the Technology Agency of the Czech Republic (TAČR) and the Grant Agency of the Czech Republic (GAČR).
If all that money went to research and science, it would be great, but everything has to be brought under control. Minister Ženíšek (Marek Ženíšek, Minister of Science, Research and Innovation – ed.) said that he had increased research spending, but in reality he had given two billion crowns to matters related to the astronaut. That is not research. But come on, if we want to have an astronaut, the relevant department has to pay for it.
Money is one thing, and the quality of research and the use of its results is another.
Of course, it is about the quality of research, we must spend money on what really brings something.
The main thing is to start managing research again. If it falls to me, I will bring the Government Council for Research and Innovation to this, we must go through all the chapters and continue working on the research evaluation system according to the Methodology 2017+ (it takes place in several modules: quality of results, bibliometric analysis, social relevance, management and concept – ed. note).
It is also about communication with the Academy of Sciences, TAČR, GAČR and the ministry.
How do you see the future of the automotive industry in the Czech Republic? Will its contribution to the performance of the Czech economy still remain as significant? The sector is undergoing a transformation that brings with it a number of problems, would it not need some specific support?
The automotive industry will still be a very strong pillar of the Czech economy, even if its performance will rather decline in view of what is happening in the world. We see that profitability is declining in many companies, but automotive still remains the flagship of the Czech Republic.
We have to keep it here, whether with regard to employment, export activities, or contribution to added value. We should not interfere too much with car companies in what they should produce here. We should try to ensure that they have a good environment here for the creation of a research and development base, which, for example, Škoda has managed to do. In my opinion, this is a well-established car company.
But we have around a thousand other suppliers and subcontractors here. When I talk to them, they themselves say: we do not want any special subsidies, create an environment where we will have good energy prices, reasonable taxes, where there will be enough school graduates that we could employ, and if we need foreigners, so that we do not have to wait two years for them before we can employ them.
I understand that some extraordinary investment may be interested, for which we will have to create specific conditions, but let’s discuss this on a case-by-case basis. I warn against focusing on one or two incentives, investing tens of billions in support and having tens of thousands of small and medium-sized companies next to it, which are the bearers of the region’s performance and some social peace. We would disadvantage such companies by sucking people out of the labor market. That doesn’t make sense.
