Economists: Czexit ‘Economic Suicide’ for Czech Economy

Prague, Feb 7 (CTK) – The Czech Republic’s potential departure from the EU would be an economic suicide, according to the opinions of economists, the Chamber of Commerce and the Confederation of Industry.


Such step would cause loss of hundreds of thousands of jobs and some experts even say that the Czech economy would drop to the level of Belarus.


Casting doubts on the Czech Republic’s EU membership makes some foreign investors nervous.


For example, Confederation of Industry vice-president Radek Spicar today had to explain to Japanese investors the current political situation and its impacts on the economy, Spicar said on Twitter today.


The Japanese were disconcerted by information in some media where in connection with the new Czech government staying in the EU or leaving it was also talked about.


“We reject casting of any doubts on our EU membership. It sends a negative signal to foreign investors. Doubts about our EU membership could make foreign investors halt their planned investments and in an extreme case even leave the country,” Spicar later said.


“Leaving the EU could be compared to voluntary amputation of hand. To give up easy access to a market where we export over 80 percent of the total export volume cannot be labelled otherwise,” said Deloite chief economist David Marek.


“Besides economic contributions, the EU is also an important legal security for us. To a certain extent, it can protect us from ourselves, which can come in handy sometimes,” he added.


The Chamber of Commerce argues that the Czech Republic is not Great Britain and leaving the EU would therefore be an economic suicide.


UniCredit chief economist Pavel Sobisek used the same comparison.


“Brexit will mean only a slowdown of economic growth for Great Britain, according to the government’s report, but Czexit would be an economic suicide for the Czech Republic,” he declared.


“Just thinking about Czexit runs against the efforts to reduce the outflow of dividends from the Czech Republic,” Sobisek said.


“Czexit, if it really materialised, would provoke massive moving of the manufacturing industry’s production capacity outside of the Czech Republic and loss of hundreds of thousands of jobs,” he stated, adding that the Czech Republic would then be at the level of Belarus.


Potential Czexit would make access to markets more difficult to Czech exporters, it would complicate international trade and harm political ties on which the small open Czech economy completely depends, said the Chamber of Commerce.


“For the Czech Republic, potential Czexit would be completely fatal mainly from the point of view of Czech export with its nearly 85 percent going to the single European market,” said the chamber’s spokesman Miroslav Diro.


“This is why no one with common sense probably wants to return the Czech export-dependent economy to the Dark Ages,” he added.