The fall of the British currency – the pound sterling -, the stock markets and the price of oil were the first reactions to Brexit, but they will not be the only ones. The United Kingdom’s exit from the European Union will restrict commercial and financial relations on both sides of the English Channel in a process that is expected to last two to seven years. Today, 44% of British exports go to the EU, which supplies 53% of its imports. What will happen? The United Kingdom could negotiate with the European Union an agreement similar to the one with Switzerland, “which would maintain many benefits of the current relationship and would allow the British to increase control over immigration,” they say in the insurance company Crédito y Caución; or that of Norway, which contributes to the community budget and has agreements in sectors such as fishing, but does not vote or participate in decision-making. In this case, London should respect the free movement of European workers on its territory , which is opposed by Brexiters.
Another option would be the English exit from the European institutions but effectively remaining in the single market. It would depend on bilateral agreements with emerging countries, in which the EU would have priority over the United Kingdom and the latter will be less competitive. The City could lose 100,000 jobs as many companies will move to other cities in the eurozone. British GDP will fall between 1.5% and 9.5%. As it is the second largest contributor to the EU, its annual contribution to Brussels will fall on other countries: Germany will have to put 2,503 million euros, France 1,871, Italy 1,384 and Spain 906 million.
Spain will be the eighth economy most affected , since our commercial relations with the island country are valued at 55,000 million euros. There are more than three hundred Spanish capital companies established there , which would have to face more regulatory costs. Spain exports 18,231 million euros a year to the United Kingdom and imports 12,584 million. Without a favorable agreement, the exchange would fall, which would affect mainly the automotive, aeronautical, food and pharmaceutical industries. Tourism would also be affected . Spain received the visit of 1.5 million Britons in 2015, who spent 14,057 million euros; and 300,000 British have fixed residence in our country.
Everyone will notice the depreciation of the pound, so they will either spend less or return to their country. In addition, British access to social services should be reviewed, which will reduce their interest in Spain. Direct investment flows from the United Kingdom to Spain will also fall, which will affect the profits of the companies established there and the repatriation of profits. This is a problem, since Spanish investment in the United Kingdom amounts to 48,000 million euros and there are almost 700 British companies here. In addition, it receives 14% of Spanish emigrants, who will also be affected by the new conditions of access to the country and social services.
