the eurozone


It doesn't happen often, but I recently agreed with something Mariano Rajoy said. Last Friday, the unflappable Spanish prime minister told reporters in Madrid that regarding the soon-to-commence process of the UK's withdrawal from the EU, "There is no need to dramatise things."

His characteristically placid remarks come after the leaking of a document written by the Permanent Representation of Spain to the EU (PRS). Intended for politicians' eyes only, the paper was seen by El País newspaper, who relayed its doom-laden predictions about the impact of Brexit on Spain.

According to this document, the hard Brexit being pursued by the UK government will reduce Spain's GDP growth by up to four billion euros. Spain will also lose as much as one billion euros worth of exports to the UK after the latter leaves the Single Market and will have to pay in an extra 888 million to the EU Budget. The paper goes on to express concerns about the effect of Brexit on Spanish companies with big UK operations, such as Santander, Telefónica and Iberdrola.

It also warns that the lives of Spanish footballers playing in the UK might be made difficult by Brexit. That makes you suspect, if you didn't already, that the report's creators threw in any possible negative effect of Brexit on Spain (interpreting "negative" loosely where footballers are concerned), found some statistics from somewhere to back them up, and came to an often-reached conclusion: that Brexit will be a disaster for all concerned.

The report did, at least, express one unassailable opinion - namely, that Brexit would have "innumerable repercussions". But then anyone who hasn't been living in a hermitage since last June could have written that.

Attempts to be definitive about the costs of Brexit - both for the UK and for other EU member states - are premature, odd as that might sound almost nine months after the referendum. We are still a long way from knowing what trading deals are likely to be struck and with which countries, what probable impact Brexit will have on sterling and the euro and what impact that, in turn, will have on the UK holidaymakers who currently favour Spain. Socratic humility is called for regarding the outcome of Brexit, because as yet all we know is that we know nothing.

El País reported that the PRS authors obviously favoured a soft Brexit. This is understandable, but it highlights what will be the fundamental problem when the exit process finally starts. The UK has stated it will leave the Single Market as well as the EU and the latter, it is now clear, wishes to punish the UK for doing so.

The undertone of reports such as the Spanish one leaked by El País is that if key EU countries are going to be hammered by Brexit, they're less likely to be amicable during the Article 50 process. While the importance of that "if" cannot be overstated, key players in the EU are already taking a combative stance towards the UK because of the perceived implications of its withdrawal from the Single Market. And so a vicious circle is created, as the nature of that exit will be determined precisely by negotiations that are being soured before they've even begun.

I'm with Rajoy, though: there's no need for drama or hysteria, especially before Article 50 has even been triggered - although "ignited" is starting to seem like a more appropriate term. Brexit is going to be complicated enough as it is.