EU Brexit negotiater Guy Verhofstadt

Fernando Clavijo, President of the Canary Islands Government, and Pedro Ortega, Minister of Economy, Industry, Commerce and Knowledge, held a meeting last week (2 feb) in Brussels with Guy Verhofstadt, the leader for the Group of the Alliance of Liberals and Democrats for Europe (ALDE).  An outspoken europhile, and opposer of UKIP, last September 2016, Verhofstadt was appointed lead Brexit negotiator for the European Parliament.

Fernando Clavijo told Guy Verhofstadt about the creation, by the Government of the Canary Islands, of a Commission, whose objective is to periodically monitor Brexit and its consequences, recalling that the United Kingdom is an important source of direct foreign investment in the Canary Islands.

In fact, in the period of 2011-2015, the UK was the biggest foreign investor from the EU in the Canary Islands economy, totalling an average of 10.5% of all total foreign investment in the Archipelago. The UK average annual investment in this period was quantified as around 11.31 million euros.

The MEP responded by asking the president to send him reports prepared by the Government of the Canary Islands to analyse the impact of Brexit on the Canarian economy with the aim of taking into account the specificities of the Archipelago during the discussion of the resolution on Brexit, which is to be put before the European Parliament in March for approval.

Fernando Clavijo also pointed out that the UK is an important market for agricultural exports from the Canary Islands. In fact, in relation to the value of total exports to the UK, vegetables (especially tomato) accounted for about 57% of the total in 2015.

With regard to imports, Mr Clavijo said that UK is also a major supplier of agricultural products, and in particular vegetables which account for 25% of total imports.

For all this, the Canarian representatives stated that “a sudden departure, without a commercial agreement for the free movement of goods and services, could harm the Canaries.”

This meeting also served to convey concern among the Canary Islands about the effects that Brexit may have on aid for transport of agricultural goods to the United Kingdom.

With regard to tourism, the President of the Canary Islands Government said that the British have a notable presence on the Islands. In fact, the number of British travellers staying in the Canaries in 2016 accounted for 28.7% of the total number of visitors to the Archipelago. In terms of tourism expenditure at destination, the weight of spending of British tourists in the Canary Islands in 2015 reached 30.8% of the total, with a total amount of €1.26 billion, representing 3.1% of regional GDP.

Fernando Clavijo also expressed his concern that a fall in the purchasing power of the British is a real concern along with their numbers visiting, the expenditure disbursed and the amount of time they stay in the Islands

The meeting served to inform Verhofstadt that British investment in the Canary Islands property market is also a very important concern. In 2015, of the total purchase and sale of  housing in the Canary Islands by non-resident foreigners, 27% were purchased by Brits. 18.7% of the total purchase and sale transactions by resident foreigners in 2015 were houses that belong to British residents in the Canary Islands.

The President of the Canary Islands Government stated that on the Islands there are 27,349 Brits who will clearly notice any depreciation of the pound, which will reduce their spending, the purchase of housing and could even provoke their return to UK. In turn, these people, most of them pensioners, will see how free healthcare is at risk which could in turn discourage their staying in Spain.

With respect to Canarians residing in the United Kingdom, representatives of the regional government indicated that in 2016 there were 2,517 Canary Islands born citizens who had gone to live in Great Britain. This suggests that the UK is the European country to which the highest number of Canarians move and second in the world for Canarian residents only to Venezuela (20.855).

Fernando Clavijo also presented a summary of the labour market that in his opinion would be affected by Brexit. According to official Social Security data from 2015 about 8,000 Brits work on the Islands. This represents 19.3% of the total European Community workers in the Canary Islands and 10.2% of the total number of foreign affiliates registered with Social Security. The UK is the country, after Italy, which has the highest number of foreigners registered through social security in the Canary Islands.