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How will Brexit affect Catalonia?

Tourism, trade and citizens – the potential impacts on the territory and how the government is responding

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11 May 2019 12:20 PM

by

Daniel Wittenberg | Barcelona

Cheap flights, cheaper booze. Sun, seafood and football. There’s plenty of proof that Britain loves Catalonia.

But Brexit – if and when it happens – would complicate that relationship.

The speed and impact of that change will depend on how far apart the UK ends up from Europe – with current options ranging from a full customs arrangement, keeping many of the economic partnerships the same, to a cliff-edge Brexit with no deal at all.

Tourism

Tourism is likely to be the worst affected sector in Catalonia. The UK supplies its second-highest number of visitors behind the French, with over two million Brits traveling to the territory each year.

A hard Brexit, restricting or confusing Britons' freedom of movement, could bring about big losses for hotels, transport companies, and tourist shops and restaurants.

A softer Brexit, still likely to reduce their purchasing power if the value of pound drops, would also have an effect – especially at the more expensive end of the industry such as luxury and sporting holidays.

So far, the looming Brexit deadlines have encouraged Britons to book holidays in advance, pre-empting a crash in their currency, but that only keeps things stable in the short term.

Tourist properties and rentals are most at risk, as 12% of tourists staying in apartments in Barcelona are British. Conversely, if that market stumbles, it could benefit local residents.

Trade

Another disrupted area could be trade. The UK is the fifth-biggest exporter of Catalan goods, buying around four billion euros worth each year, equivalent to 1.8% of Catalonia's GDP. But the Catalan government expects it to drop down the pecking order.

Of the 3,300 local companies selling to Britain, the major ones are in manufacturing. Both Catalonia and Britain have booming car industries, and in some cases, components pass between them six times before they are finished – all on a just-in-time basis.

Catalonia may have to shoulder part of the burden if taking products across the border quickly and cheaply becomes a problem.

However, in sectors where competition is more sparse, mainly British consumers would have to pay the price.

For instance, 35 million kilograms of fresh fruit from central Catalonia is exported to the UK every year, bringing in 40 million euros. Three-quarters of that comes from peaches and nectarines – on which tariffs could be 17% if there’s no deal – and Brits would just have to eat it up.

On the other side of the coin, the value of Catalan imports from Britain is growing steadily, currently standing at 2.8 billion euros. Those could become cheaper if the currencies shift, but if tariffs did go up on both sides, Catalan consumers would also feel the crunch.

Citizens

People, as well as products, could incur added expenses.

Just under 20,000 Brits are living in Catalonia, with approximately the same number having gone in the other direction, making the UK one of the main destinations for Catalans moving abroad. None will be directly told to go home – but certain work opportunities could dry up after Brexit.

Speaking to Catalan News, the British Chamber of Commerce in Spain stressed that it will take more than work permits to protect business people and their families.

"Life and business are all about perception," said its president Chris Dottie. "Families don't worry just because they're being told to leave a country; they worry that in the future they might be told that. They're also worried about whether they might be able to afford the education for their children and other public services."

"To me, it's not just important that no one threatens my right to live where I've made my home; it's that in the future, other people will be able to follow the same path I have," he added.

There are around 370 British teachers and researchers at Catalan universities, and 1,000 Catalan academics at British institutions. None will be directly told to go home – but EU-funded research programs and partnerships will cease to apply to the UK after Brexit.

There are also fears for Britain’s future in the Erasmus exchange scheme, which sends roughly 350 British students to Catalonia each year, while 650 students swap from Catalan universities to placements in the UK.

However, industry experts believe Brexit could present an opportunity for universities such as the three in Barcelona, with competitors like Oxford and Cambridge out of the market for all but the richest international students.

Government Response

Amid what foreign minister Alfred Bosch admits is an "uncertain" climate for Catalonia and Europe, the Catalan government says it is working to "anticipate" the impact of Brexit.

It has launched an action plan for preparing and informing businesses about possible changes – including helping small companies broaden their customer base, find new partners to replace British ones, and setting up training schemes.

It has also created a web portal with updates on both the commercial and citizenship situations, featuring a 'Brexit Thermometer', which allows companies to self-diagnose how far they might be affected.

ACCIÓ, the government's trade agency, believes it's not just about damage limitation either.

"Obviously, there are always new opportunities. We are working to try and attract companies – either British or international companies that now are set up in the UK, but might want to be on the continent in order to be part of the single market," Cristina Serradell, ACCIÓ's Director of International Trade, told Catalan News.

"For example, Catalan companies and British companies are both selling their products in Germany. Obviously, there'll be an advantage for Catalan companies because they are benefiting from freedoms which the UK companies won't be benefiting from."

The growth forecast for the Catalan economy earlier this week came with a caveat: it would indeed be influenced by the outcome of the Brexit talks.

But how painful that might be, or whether it could even be helpful, is still far from clear. It’s back to the politicians to work that one out...

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  • Minister for foreign affairs Alfresh Basch on a visit to Westminster for St. George's Day celebrations (Photo: Aina Martí)

  • Minister for foreign affairs Alfresh Basch on a visit to Westminster for St. George's Day celebrations (Photo: Aina Martí)

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