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The United Kingdom continues to be the place in Europe that receives the most direct investment from Spanish companies, according to the latest barometer published on Tuesday 3 December by the Chamber of Commerce in London. Despite Brexit, the country is the top destination for Spanish investment, accumulating 14.5% of the stock in 2022 (79,486 million euros).
The flow of investment grew in the first half of 2024, after a drop in 2023. Although the United Kingdom's departure from the European Union has led to a significant reduction in the number of Spanish companies exporting their products to British clients - Icex has estimated the withdrawal of more than 50% of firms - there is still a significant flow of investment.
As has been the case with British exports to EU countries, small and medium-sized Spanish companies have found it more difficult to maintain their trade with a UK that demands more bureaucracy and costs. Large companies in four sectors - telecommunications, financial services, ceramics and air transport - have tended to account for 70 per cent of annual Spanish investment in recent years.
Between 2000 and 2012 there was an average of 24 export sectors out of the 88 recognised by the Ministry of Trade, but in recent years this has fallen to 17. After the contraction of Spanish investment in 2023, there has been a 30% increase this year compared to the first half of the previous year. Spanish firms in the UK maintain 133,000 jobs.
The survey of companies participating in the barometer indicates the effects of Brexit. Spanish businesses established in the UK have changed their feelings about the stability of institutions from last year to this year because of the election of a new government. The possibilities of advancing digitalisation is highlighted as an important attraction for their investment.
They point to two issues linked to the UK's EU departure. Firstly, they express the hope that the new Labour government will turn the relationship with the European Union around. However, they highlight the problems they have in recruiting suitable staff and the difficulties in obtaining work visas for employees from Spain.
On 17 December, a UK government delegation will meet with the European Commission to discuss Prime Minister Keir Starmer's ideas for a thorough reform of the relationship with the EU. The data emerging in recent weeks does not offer optimism that aspects of the Trade and Cooperation Agreement signed four years ago will be amended soon.
According to the Financial Times, there is no understanding on youth mobility pursued by the EU, because London does not want to commit to a temporary residency programme that looks like a return to free movement.
Brussels doesn't expect much change in the UK's position despite a change in government and the EU's stance will remain largely unchanged for as long as the UK remains outside the single market and customs union.
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