Experts agree no-deal Brexit will have important effect on Spanish economy

Source: Xinhua| 2019-03-21 00:14:03|Editor: Mu Xuequan
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MADRID, March 20 (Xinhua) -- The departure of the United Kingdom from the European Union will have an "important effect" on the Spanish economy if the UK leaves the EU without a deal, two economics professors from the prestigious IESE Business School, explained to Xinhua.

The experts added their warnings just a day after the Bank of Spain (BOE) published a report saying a no-deal Brexit would take around 0.80 percent off Spain's GDP and cost the country around 9 billion euros (1 euro = 1.13 US dollars) over the next five years.

The IESE professor, Juan Jose Toribio, agreed with the BOE, telling Xinhua that a no-deal Brexit would have an "important effect on Spain."

"Spain has a trade surplus of around 10 billion euros with the UK, so obviously the interruption of commerce between the two countries would affect our economy," said Toribio.

His companion Alfredo Pastor, another professor at IESE, agreed, saying "the uncertainty is such that we still don't know what is going to happen."

That uncertainty was heightened on Wednesday when British Prime Minister Theresa May asked the EU to extend the deadline for Brexit from March 29th to June 30th, although the EU has yet to reply to her request.

"Spain exports products worth around 20 billion euros a year to the UK and earns a further 20 billion euros from British tourists. So if that is interrupted, there will be a major effect on the Spanish economy," he confirmed.

Professor Toribio also pointed out that a no-deal Brexit would affect some sectors of the Spanish economy more than others.

"It would mainly affect tourism, the car industry, which is important in Spain, and the agricultural sector, because of all of the exports of fresh fruit and vegetables to the UK," he observed.

"Around 20 percent of the tourists who come to Spain do so from the UK (17 million in 2018)... If that tourism was interrupted, it would be important for Spain," with "coastal provinces, the south and the cities of Madrid and Barcelona," the most affected said Toribio

Professor Pastor was, however, optimistic that some of the worst effects of a no-deal Brexit could be avoided

"I have no doubt that if the processes can be made easier; we have already seen guarantees for British people resident in Spain and Spanish nationals living in the UK," he said.

"We hope the consequences won't be too hard. We will need to renegotiate all of the treaties and agree new tariffs, but there is no reason to believe it will totally paralyze trade," added Pastor.

Meanwhile Toribio said that at the moment, "the most important thing we can do is to give ourselves time so that the consequences of whatever decision is finally taken over Brexit are diluted by time."

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