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Concerning Brexit and its impact in the Balearic Islands (Results medium and long term)

22mar.

Derecho Inmobiliario y cuestiones Fiscales

As we explained in the first part the impact of Brexit in the Balearic Islands, the short term results do not present great problems for the economy of the islands. However, we need to assess the results at medium/long term. What could these results be?:

  • The possible restrictions of the free circulation of people and merchandise. Because of this, both the governments as well as the airline companies could pressure and try to reach agreements in order that these restrictions not be important nor cause serious obstacles. A model to be followed could be that of the rules existing in Norway and Iceland, countries not within the EU and that allow a fairly free transit of people and merchandise.
  • An increase of 100% of the holiday packets in accordance to the depreciation of the pound. The tourist companies will not be interested in an excessive increase and will seek for flexible campaigns to adapt to the new situation and offer attractive and affortable tourist packets for the British population.
  • Reduction of the number of permanent British residents in the Balearic Islands due to the rise in taxes and cutbacks of social benefits. In this sense, the European Union and the United Kingdom should guarantee the rights of their nationals living in another country, whereby it is foreseeable that agreements will be negotiated concerning social benefits to foreign residents. On the other hand, United Kingdom will endeavor that there is not an excessive increase in tax pressure to their citizens resident in Spain nor the creation of new taxes that could be excessively costly.

However, in spite of these circumstances, it is important to point out that neither at medium nor long term the results of the Brexit could reduce the value to the enormous tourist attraction that the Balearic Islands arouses in the British population, therefore the Islands could favourably overcome the fearsome Brexit. Additionally the difficult circumstances in other countries such as Turkey, Tunisia, Egypt or the Middle East areas and the East Mediterranean, have resulted that the number of tourists visiting the islands have exceptionally increased. The climate, the gastronomy and the security guaranteed by Spain against other more unstable countries are the reasons giving value to our country and therefore to the Balearic Islands. Thanks to this we can allow ourselves to plan a reasonably optimist future concerning tourism. On the other hand, the tourist campaigns carried out towards the British tourists with higher purchasing power could be a guarantee that, in spite of the worst possible scene of the Brexit, the impact in the Balearic Islands be minimum, as the tourists and purchasers with high purchasing power will not be greatly affected by the exit of Great Britain from the Union. It should be pointed out, additionally, that in the case of the British investors the fact that the United Kingdom is leaving the Union does not mean that this should be a hindrance to invest in Spain. Finally and due to the great number of British residents in Spain, the Spanish and British government must negotiate in order to reach an favourable agreement to offer security to all the British citizens who are residing in our country. In conclusion, Brexit does not have to be a problem for the Balearic economy. It will not be so on short term and at medium and long term its consequences can be easily alleviated, as long as quick, creative and efficient solutions are given to the problems that arise. From our lawyers office in Baleares we are at your disposal to offer all necessary information.

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