Spanish economy to be hard hit if Britain quits EU

By Hanadi Watfa

MADRID, June 21 (KUNA) — Britons go to the polls on Thursday to decide if their country will remain in the European Union (EU) or to leave it.
No doubt, a decision to quit the 28-member bloc will impact the economies of the other EU countries, including Spain.
Britain is a strategic ally and a strong partner for Spain, a fact that suggests that the June 23 referendum will have unpredictable potential repercussions on the Spanish economy.
Fields expected to be affected include trade exchange, investment and tourism. Up to 30 million people travel between the two countries annually. Among British citizens living abroad, 309,000 reside in Spain.
In addition, Britain is the world’s fourth biggest market for Spanish exports, and a sudden quitting will lead to huge losses, that will have to be remedied through bilateral agreements.
Tariff and non-tariff barriers expected from a Brexit will no doubt hit trade flow hard.
Spain’s exports to Britain in 2015 reached 18.2 billion euro, and imports were 12 billion euro. Surplus in the Spanish trade balance over the period 2010-14 was 1.1 percent of Spain’s GDP.
Moreover, Spain is the sixth biggest foreign investor in Britain, with accumulated investment worth 62.1 billion euro, according to 2014 statistics.
Up to 14 percent of Spain’s investments overseas have found their way to Britain.
By the same token, Britain is the world’s biggest fifth foreign investor in Spain, with 21 percent of the capital flowed into the Kingdom. Accumulated investments hit 24.6 billion euros till 2014, up to 10 percent of foreign capital invested in the country.
According to figures by the Spanish Institute for Foreign Trade (ICEX), up to 700 British companies are operating in Spain, while 300 Spanish firms are based in Britain. This creates a dire need for redrawing the ties between the two kingdoms in case London leaves the bloc.
According to the Organization for Economic Cooperation and Development (OECD), the impact of a Brexit on Spain will be moderate, the same like on Germany and France. Standard Poor’s rating agency expects Spain to be the 8th among the ten most vulnerable countries to be hit by Brexit. (end) hnd.msa