Prague Could Lose 0.5-1 GDP in Case of No-Deal Brexit - Czech Foreign Minister

"There are several possible scenarios. The most pessimistic options, of course, come from the 'no-deal' Brexit. Estimates indicate a weakening of the Czech economy at a level between 0.5 and 1 percent of GDP. This is a very serious fall, so I believe that it is not in the interests of any of the parties that the UK withdraw from the EU without an agreement", Petricek said on the sidelines of the Munich Security Conference.

According to the minister, the impact of such a scenario on the UK economy would be even more significant.

"The practical side of the 'hard' Brexit will be even more problematic. France is already preparing for immensely long convoys of trucks that will not be cleared by customs because there will be no documents on the basis of which this can be done", Petricek said.

Similar problems may arise also in air transportation and in other sectors, he noted.

"But I still hope that a decision will be found. There is still the possibility of postponing the scheduled withdrawal date [March 29] if the UK side asks for it," the minister noted.

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According to the Czech Statistical Office, the United Kingdom is one of the most important partners for the country. It accounted for 4.9 percent of total Czech exports in 2017, while UK share in Czech imports was 2.3 percent.

The latest forecast of experts of the international consulting company Deloitte revealed the Czech economy is expected to grow by about 2.2 percent in 2019.

The United Kingdom is set to leave the European Union on 29 March. While London has managed to negotiate a withdrawal deal with Brussels after months of intense talks, the agreement has faced a wave of criticism in the United Kingdom and mounting calls for a second Brexit referendum, with the parliament so far refusing to endorse the deal.

Meanwhile, the Czech government has prepared a bill defining the Czech-UK relations in case of a no-deal Brexit. According to Jan Hamacek, the country's interior minister and first deputy prime minister, "the bill envisages a transition period until 31 December of this year, during which UK citizens will be granted the same position that they had as EU citizens in a range of spheres in our country".

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Jan Hamacek said in January that if the proposed bill was not passed, then around 8,000 UK citizens residing in the Czech Republic would have a status of foreigners from non-EU nations after Brexit. This means that they will not be able to work legally there unless they received special permits, and they will also be unable to use medical and social services.

Since the no-deal Brexit raises concerns due to uncertainty both for UK citizens and companies living and working in the EU states and for the UK-based EU citizens and firms, the EU states have engaged in contingency planning.