Junta seeks to mitigate effects of Brexit

Brexit has panicked the Junta, as it has the potential to devastate the economy of the region.

The greenhouses of Almería
The greenhouses of Almería

Now President Susana Diaz has ordered the creation of a high-level working group to analyse the possible effects, and recommend a plan of action.

The new working group is composed of senior civil servants from just about every Andalusian ministry, reporting back directly to the council of ministers of Andalucía.

The minister of agriculture suggested last week that Andalucía might sign a free trade agreement with the UK independent of Spain if negotiations dragged on, although I suspect she was just trying to reassure our local farmers (would such a thing even be possible? One to keep the lawyers busy!)

The UK is the single largest investor into Andalucía and the fifth largest purchaser of fruit and veg – 12 % of all agricultural exports go the UK.

Last year, the UK bought 1,7 billion euros worth of stuff from Andalucía, and sold it 709 million euros. Over the last twenty years UK companies have invested €1,3 billion into the region, and it’s the sixth largest receiver of investment by Andalusian companies (667 million euros).

Another angle the Junta will be examining is the legal question of residency. There are more than 80,000 Brits resident in the region, and the British market is the single largest foriegn source of home buyers. The CEOE, the association of Spanish businesses, has already warned that Brexit will seriously affect the Spanish costal housing market, and the larger economy, unless the government reassures Brits that they are still welcome in Spain.

The UK is also the largest tourism market for Andalucía – it sends more than 2 million tourists here a year, more than 25% of the total. In all, 15 million Brits visited Spain last year, the largest market by far (France sent 11 million and Germany only 10 million).

The biggest fear at the moment is agriculture. The EU buys so much stuff from the region because of trade barriers to protect Mediterranean farmers. So although North Africa has the capability to supply European markets, the EU imposes strict import quotas and increases their prices by artifical tariffs.

So once the UK leaves the EU, there is nothing to stop the big supermarkets from sourcing their veg from elsewhere in the world – which would probably drive down prices in UK supermarkets, as Morocco can supply tomatoes cheaper than Almería can, thanks to lower wages and a less labyirinthian supply chain. Especially if the EU whacks another trade quota ontop of the supply chain costs.

How to stop this happening? That’s what the Junta is wondering, too.

One Reply to “Junta seeks to mitigate effects of Brexit”

  1. Politicians may spend sleepless nights trying to find an answer but market forces as always will determine the outcome.

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