16th July 2024
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What’s next for Anglo-Spanish relations in the post-Brexit era?

Spain and Britain are both grappling with an economic crisis created by Covid-19 and the enormous challenges that this presents, whilst also adjusting to a post-Brexit era.

What happens next with Anglo-Spanish relations? This is a question that many are asking, with Britain’s exit from the EU putting a different spin on the relationship between the two countries.

Hugh Elliott, British Ambassador to Spain, is clear about the potential opportunities that are ahead for both nations, and the importance of these connections between Britain and Spain becoming stronger than ever before.

He highlighted the benefits of this special relationship in a contribution to a recent report produced by the Official Monetary and Financial Institutions Forum (OMFIF), an independent think tank for central banking, economic policy and public investment.

Elliott said that the report illustrated ‘the enormous scope that exists for the UK and Spain to work together, learn from each other and forge new people-to-people, company-to-company and government-to-government links that will form the basis of our bilateral relationship and prosperity.’

The OMFIF report suggests that this UK-Spain special relationship will create opportunities in a new era that supports the economies of both countries, during a turbulent post-pandemic recovery that is expected in the months and years ahead.

In Spain, the economy is facing significant challenges from Covid-19 and the devastating economic impact on many sectors, particularly tourism – a sector that normally accounts for 12.3% of the country’s GDP and generates more than 2.6m jobs. Spain was the second most visited country in the world in 2019, receiving 83.7m visitors. The number of foreign tourists who visited Spain during 2020, however, fell by over 80% to 19 million, the lowest figure since 1969.

Last week it was reported that 622,600 jobs were lost in Spain during 2020, with the unemployment rate now at 16.1%. Now, more than ever, there is a need to focus on maintaining and developing international relations with Britain, and the vital connection between the countries will need nurturing to support both nations’ recoveries post-Covid.

So just how special is the relationship between Britain and Spain, both economically and socially?

Boris Johnson and Pedro Sánchez
Spanish Prime Minister Pedro Sánchez with UK Prime Minister Boris Johnson at the NATO Summit hosted in London in December 2019. (Nato.int)

According to 2019 data included in the OMFIF report, there were 346,521 UK nationals officially living in Spain, and an estimated 182,000 making up the Spanish community living in the UK.

The British community here in Spain is the third largest foreign community after citizens from Morocco and Romania. To put it even more in perspective, Spain has the fourth largest contingent of Britains living abroad, with only Australia, the USA and Canada recording higher numbers.

In recent years, tourism has been a major contributor to the relationship; 18.5 million British tourists visited Spain in 2018, by far the largest cohort of international tourists and 7.1 million more than the number of Germans visiting that year. There were also 2.5 million Spanish tourists visiting the UK during 2018.

This again highlights the devastating impact that Covid-19 has had on Spanish tourism in 2020 and now into 2021, and the need to revive this lucrative sector of the economy when international travel restrictions are eventually lifted.

Pre-Covid, corporate activity between the nations was also healthy, with 25 UK firms acquired by Spanish companies between 2017-2019, and 92 Spanish companies acquired by UK firms over the same period.

British financial investment in Spain has been significant. During a presentation last November of the British Chamber of Commerce (BCC) in Spain’s Barometer report, Hugh Elliott said that the UK is ‘the biggest investor from the EU in Spain … this close economic relationship and friendship will continue after the Transition period.’

Luis Pardo, president of the BCC in Spain, also highlighted the importance of this investment, helping to ‘maintain no less than 235,600 jobs in Spain, of which more than 60% are direct.’

Spanish Prime Minister Pedro Sánchez and his wife Begoña Gómez
Spanish Prime Minister Pedro Sánchez and his wife Begoña Gómez arriving at a function at 10 Downing Street during the NATO summit held in London in December 2019. (Pool Moncloa / Fernando Calvo)

José Luis Martínez Almeida, mayor of Madrid, presented figures at the presentation that highlighted ‘the stability of the relationship between Spain and the UK, and that 34% of foreign investment from the community of Madrid goes to the UK.’

It’s clear that relations between both nations are key to support recovery and maintain financial prosperity.

Brexit does present new challenges to the Anglo-Spain relationship, but importantly it also creates new opportunities for both countries to work even closer together, as Elliott and others are keen to point out.

Business relationships, climate change and a common values agenda, including human rights and gender equality, are all cited as themes that both nations’ governments are addressing in 2021, alongside economic revival from the devastation of Covid-19.

Many in Spain and the UK will be watching with increasing interest to see how challenges are overcome and opportunities are created in the months ahead, as the special relationship between the two countries evolves in a post-Brexit, and eventually post-Covid, era.

ALSO READ: Q&A for UK Nationals living in Spain, with the end of the Brexit Transition Period

ALSO READ: UK and Spain reach ‘principle of agreement’ over Gibraltar

Click here for all our reports related to Gibraltar.

Click here for all our reports related to Brexit

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Keith Simpson 7th February 2021 at 7:27 am

Are there any discussions on retired U.K. nationals who want to spend longer than the 3 out of 6 months in Spain, we own 2 properties in Spain however we don’t want to be tax domiciled in Spain. All we want is to come & go as we please spend money in Spain & be no burden on the Spanish economy. If there isn’t more flexibility we are thinking of selling up in Spain.

David Traynor 8th February 2021 at 2:45 pm

Quite honestly I and many others feel the movement restrictions are the most detrimental to Spain, we have a villa there but we aren’t resident there. we go along for half of the year and spend a lot of money there, we travel through France on our motorhome because we have two dogs. the free movement restrictions and the rules that have changed to do with pets means sadly we won’t be visiting as often, we have over 80 friends who have either put their villa up for rent or sold because they feel its no longer worth it. Our next door neighbours on one side in Spain are members of the U3A, it has gone down from 60 members to 12 all have returned, I wish I new who to write to in Spain. Spain needs to work a deal directly with UK that removes the restrictions and allows the pet passport as usual. What I will never understand is why everything has got to change just because of Brexit. one day a dog can come into Spain on the passport the next its all protocol, why? and one day you can enter with dairy and meet on board the motorhome and just because of Brexit you can’t, why? Nothing’s changed in those directions at all and no reason too. Maybe there could be a yearly card for people who own property who wish to still be classed as European, we do, but quite honestly if everyone knows the amount of people like we do who have left Spain, Spain will suffer badly and its just not fair on them. Our Spanish next door neighbours are lovely they have a business sadly it relies on the British public; its virtually gone to the wall, this situation is not covid its simply that too much has changed. even we, after owning our home for years there, we are considering will it be worth keeping it. We calculated that in 2020 we spent over twenty thousands pounds in Spain, sadly with the restrictions and the rigmarole with the dogs we will be lucky if we get a couple of months. So even we are now questioning is it worth it having all that money tied up in a villa you can’t freely visit with your family and your pets.


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