The consequences of Brexit for the Costa del Golf
The last June 23rd, the british decided to leave the EU, but the consequences are most likely to be seen in the next 2 years
The most recent data from the National Statistics Institute say more than 55,000 Britons living in the province of Malaga, a major decline despite the crisis contingent led by then became nearly 80,000 in the second half of this century. Not all live on the Costa del Sol, but is necessary to add to the inhabitants of neighboring municipalities gaditanos (only San Roque registered- more than 1,500), so the figure would increase. UK consulate in Malaga also reports “an estimable figure floating population” happens in the “many months a year without having to register or officially take up residence” says Ignacio Acosta.
The Brexit, if any, compromise the situation of this large colony, composed not only for retirees but also for workers and entrepreneurs who have contributed decisively to the economic boom in the region. Obstacles to the free movement of capital taxed the collection of money from the British system of pensions, both public and private and, above all, lastrarían the real estate sector because the rates for financial operations abroad would be a deterrent to potential British buyers.
From the Department of Tourism of the Junta de Andalucía also he warned about a possible drop in British visitors, who but chose by nations with which Britain holds more distant historical ties as Malta or Cyprus or even destinations but where prices are more competitive, and very known real estate destinies. In 2015, Andalusia received 2.16 million British tourists, 24.9% of foreign tourism in the region. “Just because the discomfort traveler you supposed reinstating a border, worsened substantially,” he admits an official source. “The Brexit is last thing we should now turn to approach the pre-crisis records.”
The only good news that the departure of the United Kingdom of the European Union makes the Costa del Sol is that the referendum was held in late June, when most of the summer holidays are already arranged and the scope for change plans is scarce. It is therefore possible that the impact of ‘Brexit’ hardly have an impact during the upcoming tourist season, despite not be ruled out any befallen start. But from there all are dark forecasts and, in the best case scenario, uncertainties.
When the Costa del Sol began his long and prolific relationship with the United Kingdom, Spain still lived in democracy and the British were preparing to join the European Union. Therefore there is no precedent that can be referenced to know what will happen in the future. These are all unknowns.
That relationship began in tourism was embracing other fields as those who had come to enjoy a few days in the sun saw in the Costa del Sol a destination to stay and live. were retired to the price of the pound shot them the purchasing power of pensions first. Later, residential tourism and all industries that grew around them. The exodus continued as new technologies extended the possibilities of working or remote control investment. Today, after the earthquake of the crisis that generated a migratory movement back a certain volume, the British living in the province are more than 56,000, according to the latest updated data provided yesterday by the Prefectures, and not all are pensioners. In fact, 9,055 workers of that nationality traded to the Spanish Social Security in the province of Malaga. 20 % of British residents of the province resides in Mijas and another 35 % is split between Fuengirola, Benalmádena, Estepona and Marbella. But it is not only a phenomenon of the Costa del Sol. Alhaurin el Grande is the sixth town with more British residents, who are present in 96 of the 101 municipalities Malaga.
The influence of Britishness in social, economic and cultural life of the province beyond tourism also realize the 16 schools providing instruction in English -in Coast, where most is, most of its students are from families or implantation British ones it has achieved.
The ‘Brexit’ has upended all this relationship between the British and the Costa del Sol. Tourism is the first affected. The sharp drop suffered by the price of the pound just opened yesterday markets and possibly follow in the coming days will result in a lower purchasing power of tourists are foreigners, currently the biggest spenders in the province of Malaga, and also surely fewer travelers.
A similar effect can be expected on investments in the Costa del Sol, where they proliferate real estate projects aimed mainly at UK market and supported financially from the ‘city’ London, possibly lose weight as the epicenter of European finance. Similarly, agricultural exports from the province to the British market will suffer less weight by the pound and the end of the free movement of capital and goods.
Also, the whole network of small and medium enterprises tissue around the more than 56,000 British residents on the Costa del Sol, which will lose purchasing power to the extent that their income depends on the price of sterling, will be seriously affected.
Go through the bureaucracy
From the administrative point of view, the British residents will begin to pass through the filter always uncomfortable bureaucracy. The director of one of the British schools in Marbella, who prefers not to be named, yesterday wondered aloud what difficulties he will face in the near future when hiring native teachers.
This is just one example, but evidence to what extent the decision taken by the British voters may affect their fellow countrymen of the Costa del Sol.
The concerns of British residents of the municipalities in the province of Malaga cover all fields: administrative, health, fiscal, economic and even political rights. Administratively, at the time that the UK no longer a member country of the European Union, a process that will culminate in two years with the signing of a disconnect, national cease to community residents. The situation in which they will depend on the content of that agreement, but will have to deal with a residence permit, and if work in the ordinary way. This implies restrictions on time paid employment, where legislation gives priority to the Spanish and community workers.
Health is another area in which an unknown and one of the reasons of concern for British residents who lose their European health insurance card opens. Although all persons listed in Spain are entitled to health care in the public system, the situation in which pensioners are cause for uncertainty. The new situation can end the so-called ‘health tourism’ -people who traveled from UK to interpose in the Spanish- public health although it was a residual phenomenon when compared with the volume of tourists visiting Spain. Health care for tourists is another point to be set by the treaty output.
Fiscally, the British residents in Spain pay taxes in both countries, but their status could be modified to output consummated. Similarly may be affected pensions, as updated UK retirement benefits for its residents in the European Union but not in some third countries, as in the case of Canada. It is unknown what policy will continue when the output of the Union is consumed, although the pension itself will be affected, and thereby the purchasing power of residents, the devaluation of the pound, and of course the mortgages when they buy properties in Costa del Sol.
In terms of political rights, the British residents of the Spanish municipalities currently have the right to vote and to be elected in municipal elections as citizens of the European Union. they can only preserve this right if Spain and the United Kingdom signed a reciprocity agreement.
The economic consequences for Spain
Spain is one of the countries most directly affected by the Brexit. They are not only important commercial weight of the United Kingdom in the external accounts of Spain, and the interests of Spanish companies in the islands. In Britain more than 300,000 Spaniards live concentrated in the region of England
Undoubtedly, the first London would be interested in negotiating a special agreement with Madrid, since the vast majority of around thousand compatriots living in our country are retirees who benefit from the Spanish health system. Between 2000 and 2010, the number of older British residents 60 years increased by 400%. The Spanish authorities estimate that nearly half of British expatriates are over 50. According to a report by The Guardian, pensioners praise access to specialists, the quality of medical equipment and infrastructure of public health system Spain. Even they laud the efforts of doctors to make himself understood, as many Englishmen, especially those living in the Costa del Sol do not speak Spanish, according to our real estate expert.
Currently, the UK transfers a monthly sum to compensate for every pensioner legally resident in Spain. However, this only applies to those who have registered with local authorities. However, most do paperwork.
In an economic environment like this, this is a serious problem for four key issues: visas, health care, education and pensions. The number of people with cross residence in both countries is high enough to treat these areas with great delicacy, especially when the individual relationships between the UK and Spain have never been too good taking by the unresolved conflict of Gibraltar.
Despite the umbrella of Brussels, Spain is obliged to reach an agreement soon so long as affect the stability to the tourism sector uncompetitive, losing its current status as number 1 worldwide tourist attraction.
However, one of the issues that remain in the air, and that is vitally important for Spain, is who or what will fill the gap left UK in Europe both the EU budget and the European financial system.
Although the Bank of England and the European Central Bank (ECB) are going to take joint action to prevent tensions in the interbank market (key, for example, to avoid missing money at ATMs UK) to a change in its institutional framework, recession in 2017 or final bursting of the housing bubble in London.
If the depreciating British pound continues to reach EUR 1.1 per pound, subtract Brexit between 3 and 4% net profit attributable Santander. His position in Spain’s most important bank and one of the largest in Europe is transferable to other large banks also suffer negative consequences, such as Deutsche Bank, BNP Paribas and ING. The connection between the British and Spanish banks has been strengthened in recent years despite the closure Barclays will cast its subsidiary in Spain last year.
In sum, the impact on Spain and its companies be prolonged in time, being tougher the more this institutional conflict is prolonged. For many Spanish companies (especially energy and infrastructure) in the UK survival depends on the current concession model is respected and not fall in trade protectionism. The next government has a historic opportunity to lead the negotiating team in Brussels, which will have to implement the “disconnect” in the UK and, thus, regain much of the weight lost in Europe since the Treaty of Nice in 2001 .
There are currently about 200,000 Spaniards living on British soil, although it is impossible to say because not all are registered at the Consulate a figure exactly. No one yet knows the consequences of a Brexit for community living in the country. For now, the UK would be two years in a kind of limbo until their new status was defined. Apart from having to not solicit or a visa, among other key issues, would have to decide whether they are entitled to National Health System and if a special agreement between the two countries in tax matters is established. At the level of pensions, it would have to define how it affects Spaniards pay these years worked in the UK.
Written by: CAPD
Contribution to reader: Know wich are the main consequences of the british departure from the European Union to the region and Spain in general.
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Ignacio Acosta Sorge con más de diez años de experiencia como asesor, agente y empresario inmobiliario en la región autonómica de la Costa del Sol, se precia de ser uno