OPINION: Brexit causes yet more money worries for Brits in Spain

Sue Wilson of Bremain in Spain examines concerns over the news that British banks are cutting off customers living in the EU thanks to Brexit.

OPINION: Brexit causes yet more money worries for Brits in Spain
Photo by Nick Pampoukidis on Unsplash

British citizens across Europe have recently received letters from some of the UK’s biggest banks, advising that their UK-based bank accounts will be closed when the Brexit transition period ends.  These closures will apply to credit card and/or current account holders who live in the EU but maintain banking facilities in the UK.

Britain’s largest banking group, Lloyds, started notifying of account closures in August, although not in all EU countries. Lloyds said it had written to customers living in “affected EU countries” to advise it could no longer provide them with “some UK-based banking services”, because of Brexit.

Confusion is increased due to the fact that only some banks are taking this stance, and only in selected EU countries. At present, only Lloyds, Coutts and Barclaycard (not Barclays bank) have notified customers of account closures.


Recent newspaper coverage, especially in the UK media, has done little to curb customers’ concerns about the issue. Headlines warning that tens of thousands of Brits “would be stripped of their bank accounts and credit cards in weeks” have caused sufficient concern that many customers have contacted their financial providers, regardless of whether they’ve received a letter. The responses they received have hardly been enlightening or reassuring.

It’s understandable that answers are vague. While Brexit negotiations are ongoing, and before any deal between the EU and the UK is reached – if one is reached – then the terms for transferring monies to the EU are an unknown quantity. If the current EU-wide banking rules no longer apply to the UK after December 31st, it would be illegal for UK banks to provide services in the EU without a licence.

If no agreement is reached, banks will decide if it is cost-effective to apply for these licences. That decision will be based on the number of customers in a country, and the level of financial activity. You can, perhaps, draw your own conclusions from the fact that Lloyds has written to 13,000 customers in the Netherlands, Slovakia, Germany, Ireland, Italy and Portugal, and not to customers in Spain and France.

The British Embassy responded quickly to British migrants, updating its website with the following statement: “Most people living in Europe should not see any changes to their banking when the transition period ends (31st December 2020). Whether UK banks can service customers living in an EEA (European Economic Area) country is a matter of local law and regulation. Also banks are set up differently, and may have taken different actions to continue to serve their customers. Your bank or finance provider should contact you if they need to make any changes to your product or the way they provide it. If you have any concerns about whether you might be affected, contact your provider or seek independent financial advice.”

Brits living in Spain maintain British bank accounts for many reasons. Whether it is to facilitate UK travel, for business/income purposes, to mitigate exchange rate costs, or mere habit, any changes would be disruptive.

Last week, banking giant, JP Morgan, announced that it will move its £183billion business from London to Frankfurt due to Brexit. This hardly inspires confidence in the UK’s ability to protect the financial services industry.

This was then followed by the news that the UK’s richest person – Brexit supporter, Sir Jim Ratcliffe – is emigrating to Monaco with his estimated £17.5billion fortune. In the grand scheme of the high-flying financial world, it is unlikely that the banking arrangements of a few thousand Brits in Europe are high on the agenda in Westminster or Canary Wharf.

Photo: AFP

Personally speaking, I bank with Natwest and I have yet to receive a letter. My UK bank account is convenient when I’m travelling but it’s not vital. Using a Spanish credit card in the UK wouldn’t be the end of the world. My British state pension is already paid directly into my Spanish bank account, at a favourable interest rate (relatively speaking).

As a Spanish bank account holder with a regular monthly income, this also enables me to save on Spanish bank charges. Regardless of the negotiations, or the banks’ decisions, receiving my pension directly into my Spanish bank account is unlikely to change.

In the grand scheme of things re Brexit, losing banking privileges isn’t as bad as the loss of other benefits and rights, financial or otherwise. Those in a position to mitigate such losses, will do so.  British entrepreneurs are digging deeper into their pockets to retain the benefits of EU citizenship.

So, stop worrying about your UK rental income and exchange rates and head off to Malta, Cyprus or Greece and buy yourself a treat! For a one-off payment of £1million, the Maltese government will welcome you with open arms and all your troubles will be over.

Nothing at all to worry about – it’s only money, right?

By Sue Wilson – Chair of Bremain in Spain


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What is the latest on Gibraltar’s Brexit status?

With 2023 approaching and negotiations between Gibraltar, the UK, EU and Spain dragging on for yet another year, what is the latest on Gibraltar and Brexit? Will they reach a deal before New Year and how could it affect life in Gibraltar and Spain?

What is the latest on Gibraltar's Brexit status?

As British politics tries to move on from Brexit, the tiny British territory at the southern tip of Spain, Gibraltar, has been stuck in political limbo since the referendum all the way back in 2016.

Gibraltar, which voted in favour of Remain during the referendum by a whopping 96 percent, was not included in the Brexit deal and has instead relied on a framework agreement made between the UK and Spain on New Year’s Eve in 2020.

After that framework was laid out, it was hoped that the various parties – that is, the Gibraltarian government, Spain, the EU, and the UK – would build on it and quickly find a wider treaty agreement establishing Gibraltar’s place on the European mainland in the post-Brexit world.

It was thought that Gibraltar could enter into a common travel area with the Schengen zone, limiting border controls and essentially creating a custom-made customs arrangement with the EU.

But since then, the negotiation process has stopped and started, with no deal being made and uncertainty dragging on through 2021.

Despite all parties still being relatively optimistic in the spring of 2022, no resolution has been found and 2023 is approaching.

Relying on the framework agreement alone, uncertainty about what exactly the rules are and how they should be implemented have caused confusion and long delays on the border.

The roadblocks

Progress in the multi-faceted negotiations to bash out a treaty and determine Gibraltar’s place in the post-Brexit world have repeatedly stumbled over the same roadblocks.

The main one is the issue of the border. Known in Spain and Gibraltar as La Línea – meaning ‘the line’ in reference to the Spanish town directly across the border, La Línea de la Concepción – the subject of the border and who exactly will patrol it (and on which side) has been a constant sticking point in negotiations.

Madrid and Brussels have approached the British government with a proposal for removing the border fence between Spain and Gibraltar in order to ease freedom of movement, Spain’s Foreign Minister José Manuel Albares said in late November 2022. There has been no immediate response from London.

The Gibraltarians refuse to accept Spanish boots on the ground and would prefer the European-wide Frontex border force. The British government feel this would be an impingement on British sovereignty. There’s also been the persistent issues of VAT and corporation tax considerations, as well as the British Navy base and how to police the waters around it.

Though there had been reports that the ongoing British driving license in Spain fiasco had been one of the reasons negotiations had stalled, the British ambassador to Spain Hugh Elliot categorically denied any connection between the issue of Gibraltar’s Brexit deal and British driving licence recognition earlier in November.

READ ALSO: CONFIRMED: Deal on UK licences in Spain agreed but still no exchange date

On different pages?

Not only do the long-standing sticking points remain, but it also seems that the various negotiating parties are on slightly different pages with regards to how exactly each seems to think the negotiations are going.

Judging by reports in the Spanish press in recent weeks, it appears that many in Spain may believe the negotiations are wrapping up and a conclusion could be found by New Year. This perception comes largely from comments made by Pascual Navarro, Spain’s State Secretary to the EU. Speaking to reporters in Brussels, Navarro claimed that negotiations have advanced so well that they were now only working ‘on the commas’ of the text – that is to say, tidying it up.

According to Gibraltar’s Chief Minister Fabian Picardo, though negotiations are ongoing, “we’re not there yet”. (Photo: JORGE GUERRERO/AFP)

“No issue that is blocked,” he said. “All of the text is on the table.” A full treaty, he suggested, could be signed “before the end of the year.”

Yet it seems the Gibraltarians don’t quite see the progress as positively as their neighbours. Last week the Gibraltar government, known as No.6, acknowledged Navarro’s optimism.

According to Gibraltar’s Chief Minister Fabian Picardo however, though negotiations are ongoing, “we’re not there yet”.

No.6 remains positive and hopes for a deal, but in recent weeks has also published technical contingency plans for businesses to prepare for what they are calling a ‘Non-Negotiated Outcome’ – effectively a ‘no-deal’ in normal Brexit jargon.

The UK, however, seem to be somewhere in the middle. Like Navarro, the British Foreign Secretary James Cleverly recently suggested at a House of Commons select committee that only “a relatively small number” of issues remain to be resolved.

However, he also acknowledged the possibility of a non-negotiated outcome. “I think it’s legitimate to look at that [planning for a non-negotiated outcome] as part of our thinking,” Mr Cleverly said. “But obviously we are trying to avoid an NNO.”

Election year

If no deal is found by New Year, that would mean that negotiations drag into 2023 – election years for both Picardo and Pedro Sánchez, Spain’s Prime Minister.

Gibraltar is expected to have elections sometime in the second-half of the year, and Sánchez has to call an election by the end of 2023.

In many ways, Spanish domestic politics has the potential to play a far greater role in Gibraltar’s fate than British politics. In fact, the shadow of Spanish politics looms over these negotiations and the future relationship between Spain and Gibraltar, the UK and Spain, and the UK and EU.

If Sánchez’s PSOE were to lose the election, which according to the latest polling data is the most probable outcome, then it would be likely that Spain’s centre-right party PP would seek to renegotiate, if not outright reject, any deal made.

READ ALSO: Who will win Spain’s 2023 election – Sánchez or Feijóo?

If PP are unable to secure a ruling majority, however, they may well be forced to rely on the far-right party Vox, who have often used nationalist anti-Gibraltar rhetoric as a political weapon. If Vox were to enter into government, which is unlikely but a possibility, it’s safe to say any agreement – if one is even reached before then – would be torn up and the Spanish government would take a much harder line in negotiations.

As the consequences of Brexit churn on in Britain, in Gibraltar uncertainty looms.