Hard Brexit could cost Spain €1bn, leaked report says

A hard Brexit could cost the Spanish economy €1bn (£870m) in lost exports and have “innumerable repercussions” for the 800,000 Britons who live in Spain and the 300,000 Spaniards in the UK, according to a leaked Madrid report. Written for the Spanish government’s Brexit commission and obtained by el País, the report says the UK’s departure from the EU will leave Spain hugely exposed economically and will affect everything from fishing rights to the careers of Spanish footballers playing for British clubs. It says Brexit will see Spain’s GDP fall by between €2bn and €4bn, force the country to increase its EU budget contributions by €888m, and could result in some regions losing their European funding. Tourism and the food, pharmaceutical and automotive industries will be hit the hardest, with exports forecast to drop by between €500m and €1bn. The report says that well-known Spanish companies with significant UK operations, such as Banco Santander, Telefónica and the energy giant Iberdrola, would suffer if the pound weakened and the UK’s rating were lowered after Brexit. The paper goes on to suggest Brexit will have an impact on Gibraltar, migration policy, agriculture, universities “and could affect Spanish footballers in the UK”. Britons constitute the third largest national foreign group living in Spain after Romanians and Moroccans. The findings, based on information from different ministries and input from the Spanish embassy in London, says that while the UK will feel the effects of Brexit most sharply, the EU and Spain “will also suffer negative economic consequences”, adding: “The economic bonds between the UK and Spain are very tight.” According to el País, while the paper does not set out Spanish government policy, it implies that “Madrid wants a soft Brexit and not a punitive approach that makes London suffer”. The report argues that Brussels needs to consider Spanish interests – such as social security, free movement and tourism – when negotiating with the UK. Spanish sources told the paper: “The aim is to get some certainty for citizens and to help the [European] commission in its role as a negotiator. At the end of the process, the UK can’t find itself in a better situation outside the EU than in it. But if London doesn’t play dirty, the best thing would be not to do mutual damage.” Spain’s prime minister, Mariano Rajoy, called for calm in the run-up to the negotiations. “There’s no need to over-dramatise things,” he told reporters on Friday morning. “What we need to do is have good negotiations. The UK wants good negotiations, so does Europe and so does Spain and I hope that things will turn out pretty well for everyone.” The report came as details emerged of the first Spanish state visit to the UK in more than three decades. King Felipe and Queen Letizia are due to visit Britain between 6 and 8 June at the invitation of Queen Elizabeth. Both countries were quick to seize on the visit as an opportunity to underline the closeness and importance of British-Spanish relations at a time of uncertainty. In a statement, the Spanish foreign ministry said: “This state visit will serve to reflect, at the highest possible level, the strength and excellence of the bilateral links between Spain and the UK – and our commitment to maintaining them for the benefit of citizens of both countries.” The British ambassador to Spain, Simon Manley, said the visit would be a celebration not only of “the long and deep royal and historic ties between our two countries, but also our strong relationship as partners bilaterally, within Europe and on the global stage”. Source