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BREXIT

Seven ways Spain will be changed by Brexit

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.

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

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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SPAIN AND THE UK

Liz Truss: What does the new UK PM mean for Brits in Spain?

Following the announcement that Liz Truss will replace Boris Johnson as the UK’s new Prime Minister, political correspondent Conor Faulkner analyses what this could mean for Brexit and the 400,000 UK nationals who reside in Spain.

Liz Truss: What does the new UK PM mean for Brits in Spain?

On Monday September 5th, it was announced that members of UK’s Conservative party had finally elected a new leader and thus a new Prime Minister, after Boris Johnson was forced to resign at the start of the summer.

Beating rival Rishi Sunak with 57 percent of the vote, just 80,000 Conservative party members elected the former Foreign Secretary as Prime Minister of the United Kingdom and Northern Ireland.

READ ALSO: ‘Iron weathercock’ – Europe reacts to Liz Truss becoming new UK PM

But what, if anything, does her election mean for Brexit and the 400,000 Britons living in Spain? 

Will she be a continuity politician or will she forge a new path (for better or worse) in British-European relations?

Truss the Remainer

During the 2016 EU referendum campaign, Liz Truss campaigned for Remain. “I don’t want my daughters to live in a world where they have to apply for a visa to work in Europe,” she famously said.

Having once been a member of the Liberal Democrats and decidedly more pro-European, Truss’s conversion to Euroscepticism came after she had voted Remain in the EU in the June 2016 referendum.

Did the much hallowed Brexit benefits become clear to her in the aftermath of the result? Possibly. Or, as Brexit became a litmus test of loyalty and Conservatism, did her position shift to fit the intra-party politics of her party?

Although one may hope that her former pro-European positions might mean a softening in UK-EU relations in the post-Johnson era, Truss’s dependence on the Eurosceptic wing of the Conservative parliamentary party during her leadership campaign suggests she may be kneecapped in her ability to strike compromises with the EU.

Truss the Foreign Secretary

Owing to Truss’s tendency to be a bit of a political flip-flopper and change her positions at the whim of career progression, it is therefore quite difficult to predict her future behaviour with regards to Spain. We can, however, make some educated guesses based on her time as Foreign Secretary.

Going off her tenure in the Foreign Office, it seems Truss may view relations with Spain more positively than perhaps with other EU member states or the block as a whole.

In December 2021, Truss travelled to Madrid to meet with her then counterpart José Manuel Albares to build “closer economic, tech and security ties” with Spain, and to “support” the 400,000 Britons living in Spain. 

“We’re significant trading partners, with the UK as Spain’s biggest European investor,” she said, “and the UK as the top destination for Spanish investment. By boosting our trading ties even further, both Spain and every region and nation of the UK will benefit.”

Yet, Truss has also strongly hinted that she would be willing to overhaul Article 16 and put the Northern Ireland protocol at risk. If she is willing to jeopardise peace and potentially break international law to appease her political base in England, particularly within her own parliamentary party, one must wonder about the seriousness with which a few hundred thousand Brits up and down Spain’s costas will be taken. 

Reaction in Spain

Spain’s leading newspaper El País believes Truss will continue the populist strategy of Johnson. Truss was, even in her acceptance speech on Monday, loyal to her predecessor. 

She “promises citizens a rose-tinted future, without clarifying how she intends to achieve it”, the paper believes.

Sue Wilson, Chair of Bremain in Spain, told The Local that she expects Truss to “carry on with the policies of Johnson, and be led, presumably, by the same right-wing forces of the Conservative Party.

“I suspect that, as far as what affects British citizens in Spain, that continuity will simply mean we remain invisible and left to our own devices,” Wilson added.

“Britons in Spain have been left in bureaucratic limbo since the Brexit vote six years ago. Whether it be the ongoing confusion over driving licenses or renewing residency or getting new TIE cards, many Britons abroad have felt abandoned by the UK government.”

Wilson and other members of Bremain in Spain will take part in the National Rejoin March in London on Saturday September 10th to “deliver a warning to the new PM about the impact of Brexit on the spiralling cost of living crisis in the UK”,  to express a “clear and loud message” that “Brexit has failed” and to promote “Rejoin the EU” as a “mainstream” call to action.

“For six years now, Brits living in Europe have been dealing with fear, uncertainty and stress, thanks to Brexit. We have already lost important rights, and many are concerned that even those secured could be at risk. Truss plans to proceed with the Protocol Bill which threatens the legally binding international treaty that secured those limited rights. In the process, she seems determined to do further damage to UK/EU relations and our international reputation.”

Anne Hernández, head of Brexpats in Spain, told The Local Spain: “Our problem as Brits in Spain might be if she actually applies Article 16, meaning a no deal Brexit, and she has threatened that. Although I’m not sure how that might affect our rights.”

The overriding feeling among UK nationals in Spain about Truss in No. 10 is the feeling of trepidation that Hernández describes.

With its fourth leader in six years and the third to take the helm of Britain in the post-Brexit world, for Brits abroad Truss’ rise to Downing Street has prolonged that uncertainty. 

With her apparent willingness to simply tear up internationally binding agreements, many will worry if the situation in Spain will be taken back to square one.

One would hope that her previously positive interactions with the Spanish state could mean that she lends a hand in resolving some of these lingering administrative issues affecting Britons in Spain, but the propensity to change her politics when it suits her make this unpredictable, and her reliance on Eurosceptic forces within her party make it unlikely.

How about Gibraltar?

This unpredictability could be of particular concern for UK nationals in Gibraltar. After voting Remain by a whopping 96 percent, the tiny British territory was not included in the main Brexit deal that came into effect from January 2021, and complicated multilateral negotiations between Gibraltar, London, Madrid and Brussels have rumbled on without resolution. 

Truss’ rhetoric on Gibraltar during her tenure as Foreign Secretary was as combative as her anti-EU talking points during the Tory leadership campaign, continuing the us-against-them language: “We will continue to defend the sovereignty of Gibraltar.”

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