Brexit could wipe €4bn off Spanish GDP, internal report shows

Leaked document says country’s corporate giants and soccer players could suffer

Spanish soccer player Cesc  Fàbregas of Chelsea: one of some 300,000 Spaniards believed to reside in the UK. Photograph: Getty Images

Spanish soccer player Cesc Fàbregas of Chelsea: one of some 300,000 Spaniards believed to reside in the UK. Photograph: Getty Images

 

The Spanish government fears that Brexit will have a substantial impact on its country’s economy, stunting GDP and exports, hurting some of its biggest corporate names and denting sectors as varied as tourism and soccer, according to a leaked document.

Details of an internal government report on the possible effects of the United Kingdom’s departure from the European Union have been published in El País newspaper, apparently reflecting deep concern in Madrid at the UK’s impending exit.

Brexit, the report says, will have “countless repercussions” for Spain and its relationship with the UK. Spanish GDP is likely to lose between €2 billion and €4 billion, the document says. It also forecasts that the country could have to contribute nearly €900 million more to the EU budget and will lose between €460 million and €1 billion in export revenue.

“Economic ties between the UK and Spain are very tight,” it says, pointing out that the UK is the biggest investment market for Spanish firms.

However, Spanish prime minister Mariano Rajoy played down concerns when asked about the report. “There’s no need to dramatise things,” he told reporters in Brussels, where he was attending the European Council summit. “What we need to do is negotiate well.”

Close ties

According to El País, the document was drawn up with contributions from the country’s EU representatives, the UK embassy and several government ministries. It was reportedly requested by the office of deputy prime minister Soraya Sáenz de Santamaría, who heads the Spanish government’s Brexit commission.

Estimates regarding how many UK citizens live in Spain vary, with some sources putting the figure as high as 800,000. Up to 300,000 Spaniards are believed to reside in the UK.

The close ties can also be seen in the 17 million British tourists who visited Spain last year or even the many Spanish soccer stars who play in the Premier League, such as David Silva and Cesc Fàbregas. The UK’s EU exit, the report warns, “could have major implications for Spanish soccer players in the UK”.

Exposure

However, it is Spain’s corporate giants who could be among the most affected. The report highlights the exposure of banks such as Santander, 12 per cent of whose revenues come from the UK, while Telefónica has 25 million customers there through mobile firm 02.

Spain shares many Brexit worries with Ireland, which was warned about its own vulnerability by ratings agency Moody’s last week. Taoiseach Enda Kenny met Mr Rajoy in Madrid in January in an effort to convince the Spanish leader that Ireland should be treated as a unique case in negotiations.