FROM euphoric pleas from politicians and world leaders to whispers down the pub between builders and bankers, the only thing anyone is talking about is Brexit.
Since the referendum was announced for June 23 everyone – allegedly including Her Majesty the Queen herself – has thrown their two cents (or pence) in.
Closer to Spain, Gibraltar’s Chief Minister has called on British expats to vote to stay in the EU. In an exclusive Olive Press dispatch last month Fabian Picardo urged voters to avoid ‘pointless risks’, pleading with Spain’s 319,000 British voters to join Gibraltar’s 23,000 votes to stay in.
After all, Spain has threatened to shut the border and pounce on Gibraltar should the UK leave.
But the far reaching impact of Brexit stretches further than Europa Point.
Just last week Australian Foreign Affairs Minister Julie Bishop said ‘everyone’ down under is backing Britain to stay in, and at the end of the month US President Barack Obama will jet into the UK to urge Brits to stay in the EU.
And as voters gear up to go to the polls, an overwhelming focus from the world’s media and political figures has been on us expats, particularly in Spain.
Things were kicked off by Paul Drechsler, the boss of the UK’s most powerful business body, the Confederation of British Industry (CBI), who threw his weight behind the Remain campaign.
He claimed that ‘nothing’ about a Brexit ‘would be better for economic growth’ and that Britain and British expats faced ‘a significant period of uncertainty’ should the Leave campaign succeed.
In fact, two-thirds of London’s insurers, brokers and service providers agree with Drechsler that Brexit would ‘severely damage’ the UK economy, according to business strategist Haggie Partners.
Drechsler’s claims were supported by Europe Minister David Lidington who warned of ‘a decade of uncertainty’ which involved the prospect of British people not being allowed to live in Spain.
British ambassador Simon Manley has also been urging expats to vote to stay in.
A spokesman for the ambassador’s office told the Olive Press that leaving ‘would have many serious implications for many of us living here’.
Europe expert on university studies Helen Drake heaped more misery on the prospect of Brexit, claiming that British students wanting to study abroad would likely be excluded from the Erasmus project which has enabled 200,000 EU students to study abroad since 1987.
Other sector officials have put forward similar concerns: interrailing around Europe will be closed off to Brits, roaming charges and mobile phones tariffs will increase and air travel will go through the roof, are just some of the fears Brexit brings with it.
And yet, despite all the neigh-saying, there are still few answers as to what Brexit could mean to expats and expat businesses in Spain.
Here are a few voices from around Andalucia and Gibraltar on how Brexit will, may and already is affecting their solace in the sun.
Campbell Ferguson, chartered surveyor, Survey Spain, Estepona
Brexit has probably already affected my business, in that there is uncertainty by buyers from the UK as to how they are to be treated in the future. If the decision is taken for the UK to withdraw from the EU then the period of uncertainty will last considerably longer until people find out what is to happen administratively.
There could also be some panic selling by UK owners.
Other nationalities might take it as an opportunity to acquire properties from ‘distressed’ sellers. In the long term, the effect is unknown, but it’s logical that Spain will endeavour to make things as easy as possible for their major market. However, one person’s logic is not always the same as another’s!
Most expats are likely to carry on as before and deal with matters as they occur. However, there will be some businesses that will be directly and immediately affected and they will have to make the decision whether to hang on or close down.
Andy Chapell, hotel owner, Molino del Santo, Benaoján
It is very difficult to predict what will happen to our business in case of a Brexit.
I feel sure that the pound will buy many fewer euros at least in the short to mid term. This will mean that our prices will seem more expensive to the British market which is an important proportion of our trade.
We know from experience when the exchange rate last dropped that we will sell fewer of our more expensive wines, for example. However I don’t think a poor exchange rate alone will deter people from visiting Spain from the UK to any significant extent, anymore than more complicated entry procedures if border controls tighten.
I suspect a Brexit would hit harder for expats living in Spain over the next few years. As many ‘locals’ visit Molino del Santo for special occasions I would expect that trade to experience a small downturn.
As an expat myself, on a personal level I am very concerned about a Brexit in terms of how it will complicate my life here and when I return to the UK. All expats must support the Remain campaign as far as I understand the issues.
Alex Radford, Solicitor, My Lawyer in Spain, Marbella
The referendum to either leave or remain in the UE is a once in a lifetime decision which will have a profound impact on the future the EU and of the UK.
If the UK votes to leave then the UK will have a period of two years in which to negotiate its exit. Brits living in Spain for more than 183 days a year who present annual tax returns are considered Spanish tax residents. For foreigners living in Spain who are Spanish tax residents, I do not anticipate that much will initially change. However for Brits not living in Spain for more than 183 days a year, I expect the burden of tax relating to capital gains tax, inheritance tax and non residents income tax to increase.
Spain in the past has had a tendency to tax Brits and foreigners, who are non-Spanish tax residents, more than Spanish tax residents. This practice, quite rightly, has been brought to the attention of the European Court of Justice and Spain has been found to be discriminating against non Spanish tax residents.
Interesting to note that it was the European Court of Justice’s decisions which benefited Brits rather than the actions of the UK Government, and if there was a vote to leave the EU, the ECJ would no longer be looking after our interests.
Being outside the EU would likely impact income tax for expats. Typically it represents about 0.5% of the value of a property. Currently that rate of tax is 19% for residents of the EU.
If the UK were to leave the EU then this rate of tax is likely to increase to 24%, the rate that already applies to non EU residents.
Spain in all likelihood, would move quickly to strike a trade agreement with the UK to settle any nerves and ensure that we Brits continue to visit and invest in Spain.
I don’t expect British love affair with Spain to fizzle out just because of a relatively minor increase in taxation. However it would be important for those negotiating a trade deal with Spain to ensure that the British people are treated the same as Spanish tax residents.
Georgina Shaw, marketing expert, Shaw Marketing Services, Marbella
I personally believe that we should stay in the EU, as all of us expats are enjoying the benefits of free migration, Spain benefits from us as tax payers, plus our different ideas and cultures. As a Londoner I strongly feel that the city has been enriched by all the cultures who have moved there and that the vast majority of immigrants are benefiting the community by doing jobs that most English people don’t want to do, starting businesses and paying taxes.
I don’t think that an exit would impact our business very much as we are a Spanish registered company, predominantly dealing with local companies.
I would imagine it will have a short term impact on the amount of people moving to Spain as the uncertainty will make people think twice. But I think the relationship between the UK and the Costas will stay strong Brexit, or no Brexit.
Tancrede de Pola, mortgage broker, The Finance Bureau, San Pedro
Whatever side of the fence you sit on, you cannot argue that a Brexit – and even the build-up to a referendum – is proving bad for business.
Last year was undeniably the best year since the crisis for economic growth and the restoration of the property market.That was largely due to Brits investing their hearty pound in business and property on the Costa del Sol.
But that trend has already begun to falter. Since the Brexit debate began, I have had clients prefer to put off their purchase because they are worried about Britain pulling out of the EU and the resulting effect on Sterling.
There is no doubt in my mind that the referendum is already taking its toll on expat business in Spain.
Unsurprisingly, scores of ready-to-be expats are postponing their foreign adventures until after the vote. No doubt they will come flooding back and Brits will continue to invest in Spain should the UK vote to stay.
As far as I’m concerned it is much better to stick with what we’ve got than twist and risk upsetting the apple cart.
Ian Le Breton, managing director, Soverign Trust, Gibraltar
This referendum really does matter to all Britons – including those of us based on the Rock.
The financial implications are of great interest to Spain, Gibraltar and the UK.
If we don’t like the incumbent government in Gibraltar or UK, there is an opportunity to change it every four or five years at our parliamentary elections.
But the decision as to whether we remain in the EU is not one that can be reversed in a few years’ time; it will be final.
The only certainty is that the uncertainty will grow over the coming weeks until ‘R-Day’ – Thursday, June 23 – when we go to the polls. And markets hate uncertainty.
I imagine the foreign exchange market will be one to watch and, of course, the euro to sterling exchange rate is always a hot topic on and around Gibraltar.
Similarly we can expect the stock market to wobble as the date approaches and the pollsters issue their predictions.
I may not be allowed to tell you how to vote but, with the decision apparently finely balanced, I can say that every vote will count; our freedom to exercise our democratic rights has never been more important.
Our referendum definitely matters and the government will take note of the result and we will all have to live with the consequences for years to come.
Meanwhile, across the pond…
Jack Gaoini, writer and Olive Press contributor
The nation-wide food fight, otherwise known as the American electoral process, is in full swing these days. The candidates are loud and in full throated volume – strident and vitriolic.
Unfortunately, the issues that affect most Americans, namely income disparity, national debt, healthcare, gun-control, immigration, etc., are shelved in favor of personal attacks and hyperbole. Sadly, any discussion of “Brexit” or Britain’s possible exit from the European Union is minimal. But Britain’s June referendum will indeed matter to Americans and Barack Obama’s upcoming visit to the UK highlights this.
Britain has always been regarded by Americans as more aligned with our foreign policy preferences than other European states. The shared English language, the strong cultural and historical commonalities link the Britain and America in an intrinsic way. Recent history suggests that our two nation’s foreign policies have shared intelligence, nuclear technology and combat (e.g. Iraq and Afghanistan). As a result, Britain has been viewed as a natural ‘transatlantic bridge’ between Europe and America. More consequential however are the strong political and macro-economic legacies which forever bind British political thought to Americans. The theories of John Locke, Adam Smith, David Hume, Sir Frances Bacon, Thomas Malthus, John Maynard Keynes et al., shape much of American intellectual thought. Whether Americans realise it or not, English political, cultural and economic heritage permeates American lives. That legacy affects our system of laws, our economic decisions, our priorities and, in sum, our everyday lives. No matter how the British vote in their June referendum, Americas will most likely view the implications as just one more example of our shared philosophies…just one more brick in the wall of what Winston Churchill famously called “Anglo-American Alliance”. We are cousins after all.
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