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The UK’s EU referendum: Implications for the UK, EU & Spanish economies

Autor: Nick Greenwood SEFO, May 2016

Thursday 26 May 2016, by Carlos San Juan

Brexit is likely to have a negative impact on the UK economy. While some offsetting opportunities exist, the shockwaves from losing its second largest economy would be felt in the EU, as well as in Spain, where people flows and financial connections with the UK are especially significant.

The UK’s referendum on whether to remain a member of the European Union has economic and political implications that extend beyond its borders.

Polls suggest arguments related to the economy and immigration will play a key role in determining voter preferences. A vote in favour of leaving the EU (“Brexit”) is likely to have a net negative impact on the UK economy, although the long-term implications will depend on the extent to which the UK´s trade relations with the EU are permanently altered and whether the UK is able to take compensatory action. Brexit could also create significant economic spillovers for the EU, as well as call into question the wider EU project.

The Spanish economy is not immune and, unlike most other EU economies, runs both a goods and services surplus with the UK. People flows – both tourism and migration – as well as financial interlinkages are particularly strong between both countries.

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