BARCELONA—Spain could be severely hit by a no-deal Brexit scenario between the UK and the EU. As the deadline for leaving the EU approaches, concerns from expats living in both countries, as well as businesses, are mounting.
With 18 million visitors from the UK last year, Spain is the most popular destination for British tourists. The UK is one of Spain’s main markets, not only when it comes to tourism, but also for trade. In the past 10 years—2007 to 2017—the cumulative investment of Spanish companies in the UK has been around 82 million euros ($93.2 million), according to the Ministry of Industry, Commerce, and Tourism in Spain.
Understanding how Brexit will affect relations between the two countries is vital. But as the divorce talks drag on, the only certainty is that Britain will leave the EU on March 29, 2019, with or without a deal.
“A no-deal would be very bad for both countries,” said Juan José Toribio, a former executive director of the International Monetary Fund and emeritus professor of economics at IESE Business School in Spain.
Companies could have to face payment of custom duties and other taxes and, as a consequence, “exports would fall,” Toribio said. “It’s worrying.”
Igor Urra, secretary general at the Spanish Chamber of Commerce in Great Britain, an institution seeking opportunities for the promotion of Spanish and British companies, agrees. “Companies would have more costs, reducing their benefits,” he said.
According to Urra, Brexit is already having an effect on the UK’s economy: The sterling has devalued and there has been a decrease in the arrival of European workers to the UK.
Tourism Fears
Patricia Cirez, head of EU Affairs at the Spanish Confederation of Employers’ Organizations (CEOE) in Brussels said “a no-deal scenario could have a huge impact on the economy,” as well as on the daily life of many people.
She gave an example of a hypothetical situation: If there’s no deal on April 1, 2019, could a plane take off from the UK to any other European country?
If the answer was no, it would be “dramatic,” said Antonio Aranda, secretary general of the Costa del Sol Hotel Association.
The Costa del Sol, located in Andalusia in the south of Spain, is a popular spot for British tourists. Around 26 percent of visitors traveling to this sun, sea, and sand destination are from the UK and, according to Aranda, they are crucial for local companies’ revenue.
As Brexit negotiators race against the clock, concern and uncertainty are rising among Spanish companies.
But there’s also hope, noted Cirez. Although a no-deal could be a reality, Toribio believes there will be a last-minute agreement. “A break up without a deal is unthinkable,” he said.
However, according to Urra, “Spanish companies should be cautious.”
Toribio, Cirez, and Urra agree that it’s important to be prepared for the worst and to have a Plan B. “Nobody knows what will happen,” Urra said.
Expat Uncertainty
Around 240,000 UK citizens live in Spain, according to the Spanish Statistics Institute, and a large proportion of them are pensioners. They are becoming increasingly concerned.
Anne Hernández is the president of Brexpats in Spain, an association located in Málaga, Andalusia, fighting to defend the rights of British residents. She is furious.
“We have many questions about Brexit and no answer. Nobody knows anything. It’s horrible,” Hernández said.
There’s a lot of uncertainty among residents, who have doubts about their pensions and want to know if they will have access to Spanish public health after Brexit, she said.
There are even pensioners who are under medical treatment and fear that they will have to take on a cost they cannot afford, explained Hernández. Residents also have questions about their residence permit or driving license.
“The only certainty is uncertainty,” she said.
The almost 130,000 Spaniards living in the UK are also concerned. What will happen with their rights as European citizens to move freely around Europe, to live, work, study, and retire?
Some of them went to the demonstration in London on Oct. 20 calling for a second referendum on Brexit, but without any clear information, they continue to try to figure out how the UK–EU divorce will affect them.
