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?
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.’
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.
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