Seven ways Spain will be changed by Brexit

Seven ways Spain will be changed by Brexit
Dark Brexit clouds ahead: Spanish PM Pedro Sánchez meets with his British counterpart Boris Johnson earlier this year. Photo: AFP/Inkdrop Creative
Spain is forecast to be the EU country that’s most affected by the UK’s exit from the bloc, but the impact of Brexit on Spain won't just be economic.

Economic impact 

The Bank of Spain has recently said that Spain’s economy is the most exposed out of all countries in the single market to the negative economic consequences of Brexit.

Spanish exports to the UK “increased by 9 percent in 2019, equal to 3.4 percent of Spain’s GDP.

According to the British Chamber of Commerce in Andalusia, the UK is also the biggest foreign investor in Spain, with more than €8 billion pumped into the Spanish economy so far in 2020 (56 percent of all foreign investment in the country), resulting in the direct creation of 201,000 jobs.

And as we will cover in the following sections, there are a number of other economic ties that showcase the likelihood of Spain feeling the pinch when Brexit becomes a reality.

Tariffs and holdups

In the absence of a single market and a trade deal still up in the air, WTO rules will apply, meaning tariffs will go up on imported goods from either country (on average 3 percent but in some cases higher) and Spaniards and Britons will end up paying more for them.

According to the UK’s Department of International Trade, Spain is the UK’s seventh largest trading partner, with the main British exports to Spain including cars, medicinal and pharmaceutical products, mechanical power generators, beverages and consumer goods.

The UK also exports a large amount of financial, IT and business services to Spain, which although not necessarily subject to tariffs can be to trade barriers.

Spanish Foreign Affairs Minister Arancha Gonzalez Laya recently pleaded that the EU and the UK reach a deal to avoid “suffering” on both sides. 

Equally Spain exports €4 billion-worth of goods to the UK each year, including cars and food produce, running from the traditional wine, cheese and cured meats to plenty fruit and vegetables during the UK’s harsh winter months.

British Government estimates point to queues of up to 7,000 trucks at Dover and other UK ports in January due to the new regulations, so the flow of goods between both countries is likely be hit hard, at the very least initially.

A recent article in Spain's ABC newspaper reported that 12,000 jobs in Spain's fishing industry were also at risk in the event of a no-deal Brexit. 

READ MORE: Which parts of Spain will be most affected by a no-deal Brexit?

No more part-time work stints in London to learn English

Tens if not hundreds of thousands of young Spaniards headed to the UK during the last financial crisis to earn some money and improve their English in the process.

With youth unemployment over 50 percent back home, the UK offered them the opportunity to find relatively well-paid work easily, even if many of them were graduates who had to take jobs in cafés and restaurants until their language skills improved.

With the end of freedom of movement for Europeans and the UK introducing a points-based work visa, this ease with which Spanish youth tried their luck in London for a year is a thing of a past now, as they will need a job offer and language proficiency first, as well as a salary of £20,480 per year (€22,363).

This will no doubt also complicate things for qualified and experienced Spanish workers wishing to move to the UK, as the stricter conditions may make them favour another EU country instead.

There are also approximate 180,000 Spaniards living in the UK, according to Spanish Foreign Ministry estimates, all of whom have until the end of 2021 to apply and meet the conditions for settled status.

Restricted freedom of movement and travel

Leading on from the previous section, Spaniards who wish to spend more than 90 days in the UK from 2021 without working, be it to spend time with family or to explore Great Britain among other reasons, will be subject to the same restrictions as Britons in Spain in the same situation.

READ ALSO: What worries British second home owners in Spain most about Brexit

For starters, there are the European Commission’s emergency Covid plans, which will restrict travel between the UK and Spain/EU once the UK leaves the bloc.

Then there are other factors Spaniards visiting the UK in 2021 will have to keep in mind such as having a passport valid for at least six months to enter the United Kingdom, and a visa for stays longer than 90 days.

British tourism

Nineteen million British tourists visited Spain in 2019, spending €18 billion during their holidays.

They represent the most important market for Spain's tourism industry, which in pre-Covid times accounted for 13 percent of the country's GDP and provided 2.8 million people with work.

It may be difficult to ascertain just how big an impact Brexit will have on these numbers until the pandemic ceases to hamper international travel.

However, a study by Caixa Bank Research estimated that up to 5 million more Britons would’ve taken international holidays from Q3 2016 to Q3 2018 if Remain had won the Brexit vote, using the steady growth in Irish overseas tourism over that period as a comparison.

Spain will no doubt make it as easy as possible for UK tourists to continue visiting after Brexit, but a devalued currency, the need for a visa waiver (ETIAS) and other setbacks could dissuade many from spending their holidays in Spain.

Dashed Erasmus dreams

Spain is the EU country with the third highest number of undergrads going abroad on the Erasmus student exchange scheme, and the UK was until now their second favourite destination.

They valued the quality of UK universities, the language skills they acquired and the possibilities of stepping into a job in Britain straight after graduating, but all this is now up in the air as the future of the UK in the Erasmus scheme is still on the negotiating table.

Spanish villages dependent on their British communities

There are towns and villages in Spain where Britons outnumber locals, and while many of them are residents there, many others are just second home owners who up until now spent several months in Spain without restrictions, pumping money into these small Spanish communities.

READ ALSO: The towns in Spain where Brits outnumber locals

The fact that these often-wealthy, temporary residents will now have a 90-day limit on their stays could mean many choose to sell their Spanish properties, leaving these towns and villages where work isn’t abundant without their primary source of income.

 


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