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Spain starts to worry about Brexit

The deputy prime minister, Soraya Sáenz de Santamaría, who heads the Spanish government's Brexit commission. | Angel D

| Palma |

Spain is hoping that Brussels will take into account its important relationships with the United Kingdom when it comes to Brexit negotiations, according to the findings of an internal report by the government’s Brexit commission, which is headed by deputy prime minister Soraya Sáenz de Santamaría.

While Europe’s initial reaction to the referendum result was "go then and the sooner the better", the full impact of the UK leaving the EU has begun to settle in and for many countries, the consequences are worrying.

According to the report, the Spanish economy will "suffer the negative consequences" of the departure of one of the country’s leading trading partners from the bloc.

The situation of British nationals resident in Spain and that of Spaniards living in the United Kingdom is also a matter for concern: Brexit will lead to "innumerable repercussions" for more than one million people, the report states.

Over the last four decades, growing numbers of international companies have put down roots in Britain, among them some of Spain’s biggest players and now they are worried about how hard Brexit could hit them and their business.

Only yesterday, the British ambassador to Spain, Simon Manley, highlighted the fact that the two countries are major partners in trade, with 40bn GBP of trade in 2015, including British goods and services worth almost 15bn GBP exported to Spain, and imports from Spain to the UK worth 25bn GBP.

But Spain, more so than the UK, is worried that all this could change if Brussels does not allow a soft Brexit and individual countries to reach unilateral agreements with the UK which will benefit both partners.

The impact of Brexit on Spain will shave between two and four tenths of a percentage point from GDP growth (equivalent to between €2 billion and €4 billion), says the report, citing the International Monetary Fund and the European Commission, and some of Spain’s poorer regions could lose EU funding.

Brexit will likely trigger a fall of some 464 million euros in Spanish exports, with the food, automotive and pharmaceutical sectors hit hard. To try to ease the impact, Spain will be supporting a number of the UK's demands at the negotiations, such as a temporary trade deal in parallel with the withdrawal agreement.

The report talks of "temporary measures" in a number of areas. It also highlights the need for Brussels to bear in mind Spanish demands in the withdrawal negotiations on issues such as social security and the free movement of people and tourism.

And that free movement of people is vitally important to Spain with some 15 million Britons coming on holiday here every year. British tourists outnumber all other nationalities and form the cornerstone of Spain’s tourist industry.

Last year, for example, British holidaymakers spent an average 44.5 million euros per day, 24.1% more than in 2015. But apart from Brexit having reduced the strength of the pound, there have been rumours and reports of British citizens perhaps needing to obtain and pay for visas to holiday in EU countries and the combination could turn Britons away from Spain.

On top of concerns about the tourist industry, Britons residents in Spain are worried about what the future will hold for them, especially when it comes to health care and benefits while Spain is equally concerned about what situation the 300,000 Spaniards living in the United Kingdom will be left in once the UK has pulled out of Europe.

As yet, little is clear about what is really going to happen but Spain wants to keep its relationship with Britain as strong as possible.

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