ANALYSIS: Why aren’t Spanish companies preparing for Brexit?

How are Spanish companies facing up to the consequencies of Brexit? John Wetherell, professor of Economics at EAE Business School believes they are not.

ANALYSIS: Why aren’t Spanish companies preparing for Brexit?
Photo: AFP

The Spanish authorities are concerned about the apparent lack of urgency with which Spanish companies are facing up to the consequences of Brexit. 

According to the latest surveys, the fact that the EU’s second economy, its financial centre and second biggest net contributor to the EU budget is leaving is at the bottom of the list of Spanish companies’ priorities at this moment in time.

This has come as a surprise given the close relationship that unites Spain and the UK in terms of citizens living in the other country, trade, tourism and FDI.

There are probably several quite valid reasons for this situation.

The first one would be the difficulty of planning for the unknown. If we consider that often governments pass legislation which has clear implications for businesses and they fail to comply with these new laws until the very last minute or even need a period of grace before their application, it is maybe not so surprising that many businesses have made no preparations for something that has already been delayed by eighteen months and has yet to be defined.


Photo: AFP

And as businesses bide their time, it is becoming clearer that the natural majority of UK citizens that don’t want a hard Brexit – that is the close to half the population that voted Remain plus the part of the people who voted Leave but would prefer to keep different degrees of ties with the continent – are going to have their say in the final shaping of the Brexit deal. 

This will be done through Parliament and will be helped by the fact that the majority of both Houses are favourable to a soft Brexit. The House of Lords has been most active so far, even insisting that the Parliament vote on whether to remain in the Customs Union, but given the very slender Conservative majority in the Commons it is more than likely that the government will have serious difficulties passing the necessary legislation of a hard Brexit through the lower House as well.

Should they be unable to do so and the UK remains in the Customs Union or votes to join the European Economic Area then most businesses will hardly be affected by Brexit at all.

The second reason why companies might not be responding to the vision of the authorities of the importance of preparing for Brexit is that they are made up of citizens and as such share one of the principal characteristics of post-crisis Europeans – a lack of confidence in the elite.

Anti-Brexit demonstrators holding EU flags protest outside the Houses of Parliament in central London on March 29th. Photo: AFP

If there is one thing that Brexit has taught us it is that the experts that represent our institutions always get it wrong. The British government were sure they would win the referendum; the EU thought that nobody would be stupid enough to vote themselves out and the IMF predicted economic doom for the UK if they were to vote leave. 

Now the same experts tell us that if Brexit were to catch us unawares, possible tariff and administrative barriers could have a big impact on trade; a fall in the pound could force many British tourists to holiday outside Spain and the eurozone and FDI flows between the UK and the continent could be seriously disrupted. And this would obviously affect many Spanish companies.

They could, of course, be right this time but who would believe that based on their past track record? Probably not a company that has got other more immediate issues to resolve.

Finally, and maybe most importantly, the reality of the companies is being changed by globalisation. Even if the worst came to the worst and Spanish companies did lose revenues as a result of Brexit, the world is a very different place today than it was in 1986 when Spain joined the EU.

Today it is possible for many companies to sell their products and services in any country in the world. To export to Morocco, Nigeria, India or Kenya is both feasible and profitable. Behind this is the global city – whether it be Casablanca, Lagos, Mumbai or Nairobi, where there are literally millions of urban consumers with similar tastes and very used to satisfying their needs with products from all over the world.

A decline in a particular European market like the UK no longer determines the financial future of many companies. Alternatives exist. And this is ignoring the fact that this network of global cities has its own hierarchy with two cities at the top and one of them happens to be in the UK. Spanish businesses will continue to want to have a presence in London regardless of whether the UK is in the EU or not.

John Wetherell is a professor of Economics at EAE Business School which has campuses in both Madrid and Barcelona.






Brits in Europe won right to vote for life in UK but questions remain

After years of campaigns and promises British citizens living abroad finally won the lifelong right to vote in UK general elections in April 2022. But campaigners say more needs to be done to allow all those Britons abroad to be able cast their votes easily.

Brits in Europe won right to vote for life in UK but questions remain

What’s in the law?

The Elections Act 2022 introduced several changes to the current legislation on electoral participation. Among these, it removed the rule by which British citizens lose their voting rights in the UK if they have lived abroad for more than 15 years

The new rules also abolished the requirement to have been previously registered in the UK electoral roll to become an overseas voter. In addition, the registration in the electoral roll will now last up to three years instead of only one year.

It is estimated that these changes could increase the number of overseas voter registrations by some 3 million. But the way new measures will be applied in practice is still to be defined.

READ ALSO: ‘Mixed feelings’ – British citizens in Europe finally get right to vote for life

Defining the practicalities

Under the new law, Britons living abroad will have to register to vote in the last place they were registered in the UK. This means that people who have never lived in the UK will be ineligible to vote, regardless of how long they have been overseas, while those who left when they were children will be able to use a parent or guardian’s address.

But given that the UK does not require residents to register with local councils, how to prove previous UK residence? “Typical documents accepted as a proof of residence are Council tax or utilities bills, but not everyone will have them or will have kept them in an international move,” says Fiona Godfrey, co-founder of the British in Europe coalition.

Ballot papers are pictured in stacks in a count centre as part of the 2019 UK general election. (Photo by ANDY BUCHANAN / AFP)

Other questions concern how people will effectively cast their ballot. UK citizens overseas will be able to vote by post or by proxy or in person at their polling station if they are in the UK at the time of the election. However, few people are likely to travel to the UK for an election and in the past there have problems and delays with postal voting.

The Electoral Commission has recommended that overseas electors appoint a proxy to vote on their behalf. But who could that be for people who have been away from their constituency for a long time?

New secondary legislation will have to answer these questions, defining how to be included in the electoral roll and how to exercise the voting right in practice.

According to British in Europe, the government should present draft legislation in the first half of the year so that the parliament can adopt it before summer and registrations of overseas voters can start in the autumn.

British in Europe survey

British in Europe are currently running a survey to understand the difficulties UK citizens abroad may face in the registration and voting process, as well as their intention to participate in elections.

The survey asks for instance which documents people can access to prove their previous residence in the UK, what problems they had voting in the past, and if and how they plan to vote in the future.

“We need to get an up-to-date picture of British citizens living around the world and have information to make recommendations to the government, as it prepares secondary legislation,” Godfrey said. “If millions of people will exercise their voting rights, there will be consequences for council registration offices, post office and authorities that will manage the process, among other things” she argued.

The right to vote concerns only UK parliamentary elections and national referendums, not elections in the devolved administrations of Scotland, Wales and Northern Ireland, or at local level.

The survey is open to UK citizens living anywhere in the world and is available at this link.