The Word on the Street - News and Information from Spain

News and Information from Spain

The Word on BREXIT Edition - October 2016

The Word On Brexit

This is the October issue of our monthly BREXIT bulletin from Spain. During this uncertain period, we aim to keep you informed of developments following the UK referendum.

The slump in the pound has undoubtedly impacted on people with property in Spain whose main source of income is in sterling. Although we can expect there to be fluctuations over the coming months, no significant improvements can be expected in the short term.

As news dribbles through about the progress of the UK’s exit from the EU, it is Gibraltar which continues to muddy the water when it comes to future negotiations.

Gibraltar is the big issue

The latest concerns focus around the statement of José Manuel García-Margallo. The PP Foreign Minister has been quick to indicate his intention of bringing back Spanish sovereignty to Gibraltar. The exchange between García-Margallo and Fabian Picardo, Gibraltar’s chief minister, did not bode well for future negotiations.

The PP is now likely to be reelected following the PSOE’s decision to abstain from blocking the new minority government. This means that García- Margallo will very much be at the forefront of any subsequent discussions.

In the meantime, Gibraltar remains clear that it wants its own relationship with Europe free from Spanish sovereignty. Whilst Mariano Rajoy is reported as saying that once the UK abandons free movement and the single market, Gibraltar will have to do so too. Not everyone can have their aspirations realized.

Gibraltar rebuffs Spanish proposal for joint sovereignty to save EU status

Theresa May visits Spain

With Theresa May’s visit to Spain to meet with Mariano Rajoy, there was no bid to meet with representatives from the large Spanish companies with investment in the UK. Examples of these include; Santander, Sabadell, Iberdrola, Telefónica and Ferrovial (large Spanish companies) and BP, Diageo, Vodafone, HSBC and BT. The Spanish press were not too impressed with what they considered to be this major ommission.

If anyone was waiting with baited breath for the outcome of their working lunch, they were disappointed. Gibraltar wasn’t mentioned, which is probably a good thing as it is hard to see how the two heads of state will ever agree on sovereignty there.

The meeting seemed to be little more than a reasurrance that you protect ours and we’ll protect yours from the two conservative leaders. However, most people will feel a little reassured that the two are at least talking.

Brexit: all you need to know

You might be getting rather tired of coming across sites and articles that claim to tell you everything you need to know. No one can realistically claim this at the moment. However, the BBC have published their version and it does, by and large, lay out the facts. Once you’ve waded through some of the obvious statements at the beginning of the article there are some interesting summaries organised according to a series of questions.

Brexit: All you need to know about the UK leaving the EU

What the Spanish papers have to say

El Confidencial wrote about Theresa May’s visit to Spain. They note that she didn’t visit Spanish businesses during her brief stop. The paper is quite critical of this omission and refer to the impact that Brexit is having on businesses which they consider to have brought jobs and money to the UK. 

La Razón reports that the Valencian economy will grow less in 2017 as a result of Brexit. The claim comes from BBVA and includes the fact that the community exports much more to the UK than the other autonomous communities. 

El Mundo reports that Theresa May has admitted that Brexit will probably have to be passed by Parliament. The paper refers to the 2010 document that appears to recognize that the referendum was ‘consultative’ and ‘non-binding’. It continues by describing some of the division in the conservative party with some prominent Tory MPs campaigning for Parliament to have a vote and others pushing the ‘soft’ Brexit option.

Expansión is reporting that the UK will still have to give the EU millions of pounds after they have left in order to maintain access to the single market for its financial sector. The paper reports that banks in the UK are asking that Theresa May gives some assurance that their access to the single market will be protected. 

The paper claims that Nissan has been reassured by the prime minister that  their current business, based in Sunderland, will not face impediments as a result of Brexit. It reports that there might be a huge financial loss at stake if this access isn’t maintained.

The voice of Brexit in Spain?

It seems as though we’re hearing rather a lot from José Manuel Garcia- Margallo, Spain’s foreign minister. The latest is that he suggests that the trade deal between the EU and Canada might be the only model for a future pact between the block and post-Brexit Britain.

CETA is proving controversial in itself and is attracting a number of protests. It stands for the Comprehensive Economic and Trade Agreement and was negotiated between the EU and Canada from 2009 to 2014. Many organizations do not feel that it protects the rights of the individual but instead builds upon and protects the rights of large corporations.

Many aspects of CETA are the same as TTIP the Transatlantic Trade and Investment Partnership (TTIP). Another trade deal that has come in for a great deal of criticism.

Spain says Brexit deal to be modeled on EU-Canada pact

For the European Commission’s version of what CETA is: http://ec.europa.eu/trade/policy/in-focus/ceta/

Google CETA if you wish to hear what other people and organizations have to say.

Theresa May at the summit

Theresa May can’t have been looking forward to her first appearance at an EU summit. This must have been a very strained debut and Brexit was only discussed during a working dinner. Brexit will not officially be on the agenda until article 50 has been invoked.

This is how it was reported in the Guardian:

Theresa May's awkward EU meeting sees little progress on Brexit

The Independent:

Theresa May faces Brexit battles on two fronts after being sidelined at EU summit

Neither did summit experiences appear to improve with the internal summit between the devolved communities of Scotland, Northern Ireland and Wales. It was reported that Nicola Sturgeon was deeply frustrated by these talks with Theresa May:

Brexit: Nicola Sturgeon 'deeply frustrated' by Theresa May talks

May continues to emphasise that the government will not show its hand in detail until later stages in the negotiation and in Parliament asserted that general debates will take place before and after the Christmas recess.

It will certainly take all of this experienced politician’s composition and negotiating power to establish the UK’s place in a changing Europe.

Learning curve for the EU too

Voxeurop often include articles written in different language on topics of interest to the UK. In this article, Frank Beauchamp reflects on what lessons the EU might learn from the British vote: 

Lessons from Brexit that can strengthen the EU