King Felipe VI and Queen Letizia hosted the Emir of Qatar and his wife. EP

United Spanish Emirates

THE EURO ZONE ·
Spain has been forging important relationships with the Gulf states for the better part of a decade

Friday, 20 May 2022, 11:16

The United Arab Emirates (UAE) and its equally wealthy neighbours in the Persian Gulf have established close ties with Spain over the last few years. Further evidence of these mutually beneficial friendships emerged this Tuesday, when King Felipe VI and Queen Letizia hosted the Emir of Qatar and his wife at Zarzuela Palace. The Emir had some good news to share over dinner, announcing a five-billion-euro increase in Qatar's investment in Spanish projects over the next few years.

Pedro Sánchez hopes that this cash injection will strengthen his country's economic ties with the Gulf region, which was also the purpose of his appearance at the Dubai Expo in February. It was the first time a Spanish premier had set foot in the UAE since 2011, when Socialist president José Luis Rodríguez Zapatero called in on Qatar, Dubai and Abu Dhabi - also in a bid to attract more of the Gulf's abundant money and natural resources to Spain.

Zapatero enjoyed moderate success in this respect and by 2019 the UAE placed sixteenth in Spain's foreign investment rankings, with a stock of just over six billion euros. That same year Qatar's stock stood at 2.7 billion euros, so the funds announced this week amount to a 168% increase in the country's pre-pandemic investment in Spain. Serious returns are going to be expected for such a weighty financial involvement.

Details of where and how these extra funds will be spent are hazy, although Qatar wants to cash in on Spain's chunk of the EU Covid recovery funds, most of which will be chanelled into digitalisation, green energy and car manufacturing. Spain also has an ambitious plan to set itself up as a liquefied natural gas (LNG) hub for northern Europe and to increase its reliance on Qatar for LNG in order to reduce its dependence on Russia.

It's not just Sánchez, Felipe and Letizia who are on excellent terms with some of the Persian Gulf's most powerful figures. In August 2020, Felipe's father, king emeritus Juan Carlos, fled to Abu Dhabi amidst fraud allegations. Some of these centred on a one-off "gift" of 65 million euros paid to Juan Carlos by Saudi Arabian royalty, allegedly a kickback for the construction of a rail link between Medina and Mecca, the contract for which went to a Spanish consortium.

With all the financial investigations against Juan Carlos now shelved due to "lack of evidence", the emeritus king has returned to Spain for the first time in two years. The extent to which he's alienated his once-adoring people remains to be seen, but Juan Carlos needn't worry about the loyalty of his allies in the Persian Gulf: relations between the UAE, Qatar and Spain are stronger than ever.