And now? What are the costs and implications of Brexit to Portugal? It is a question that still few risk an answer. The uncertainty is huge. Europe still goes through a first moment of shock, of great turbulence, both politically, as in the financial markets. Still, it pays to align the main areas where we can expect impacts in Portugal. emigration, exports, tourism, investment and relations with Europe
One of the main expected impacts will be felt in emigration. In the years to “lead” the application of the troika bailout program, the UK has to be the main destination of the Portuguese who left the country in search of employment or a professional development that do not find in Portugal.
No one knows for sure how they get these people. However, the decrease of the potential for creating jobs in the country will be one of the consequences of a fall in gross domestic product (GDP) and economic activity, such as note Muradali Ibrahimo, professor of ISEG, an analysis of the effects of the outcome of the referendum. Another professor of ISEG, António Afonso, anticipates a “ less ease of hand labor movement between Portugal and the United Kingdom.”
One of the hallmarks of this new migration it is the high level of professional qualifications of those seeking the British market, highlights the latest of emigration Observatory report, 2015, but whose data is from 2014: “the UK is now the first country of destination of Portuguese emigration. It is a stream with new features, notably to include a high percentage of assets with higher qualifications. “
And this is one of the areas where it is feared a greater impact, as was indeed visible in reactions of Portuguese policymakers. . Stay here a testimony of disappointment and frustration of the Portuguese working in the UK
The Centre’s document also shows some traces of Portuguese emigrant profile: is a man ( 55%) are between 25 and 34 (35%) is London (46%), has a college – the UK is the destination that is higher proportion of skilled Portuguese – and there’s likely to be a nurse. The professional influx of this area is such an intense way that justified an analysis of the phenomenon
Every year are trained in Portugal between 3000-3500 nurses and about a third. – Corresponding to 1200 – began work in the UK in 2013. a survey conducted by a nurse, Nuno Pinto, via Facebook, that answered about 350 professionals residing in the country, showed that more than half did not intend to return to Portugal before retirement. According to 2014 the equivalent organization to the Order of Nurses, the Nursing and Midwifery Council, were enrolled 3,155 Portuguese professionals.
In 2014, the UK attracted about 31 thousand Portuguese. In 2013 there were 30 thousand. The number of new immigrants in the country overtook the pound, as more traditional destinations such as France, Switzerland or Germany. The number of Portuguese residents in the country was 136,000, slightly more than in Germany, but still much less than in France, about half a million, and Switzerland -. 253 000, according to still 2014
the number of national registered in the British consulates was yet more significant, almost 300,000 in 2014, the third largest in Europe after France and Switzerland and the fourth worldwide after these two countries and Brazil. The distance to some classic emigration destinations is even more significant when analyzing remittances to Portugal. The UK were transferred about 202 million euros a total of three billion euros in 2014. These figures put the migrants in the UK in fourth place in the ranking of remittances, behind France, Switzerland and Angola.
and the English in Portugal? the number of English residents was 17,230, a foreign 388,731 universe residing in the year past in Portugal, according to the Foreigners and Borders Service. Still, the English are the third most numerous European community after the Romanians and Ukrainians.
The English are still the main foreign visitors to Portugal and this is one of the sectors where it is most afraid of the effects of Brexit. in 2014 and 2015, over 20% of tourists who slept in Portugal had British nationality, a percentage that rises to 30% in the Algarve region. Last year alone, there were over eight million British residents overnight stays. This number is well above the German tourists who slept in Portugal last year, 4.8 million, according to the National Statistics Institute (INE), and more than double the French and Spanish who visited Portugal in 2015.
Although they are the ones that visit Lusitanian territory, the British are among those who have lower average daily spending. According to a survey conducted by INE, the average British tourist spent 91.5 euros per day on average, that sum was below the average value was found between non-residents and that was in the order of 104 euros per day.
Still, the immediate, the output of the UK “will not have significant consequences,” argues João Loureiro, professor at the Faculty of Economics of Porto. “Who traveled to Portugal will continue to come, it is not because the UK is a checkout process that stop coming,” he anticipates. “Unless there is a severe recession in the UK and the pound depreciates much”, he points out.
If this scenario materializes, tourism will suffer from the drop in purchasing power of the English, as the euro also lost value, although less
These companies may be among the economic operators most affected by the Brexit not only the UK is one of the major international markets. – logo, a decline in the economy and purchasing power, accentuated by the devaluation of the pound against the euro, punishes Portuguese companies – but also because it anticipates the return of customs duties to products intended for the British market which originate in the European Union
This threat is enhanced by António Afonso, ISEG teacher. “For Portugal, the effect may be felt at the level of trade, which may suffer some reduction with a imposition of tariffs on imports from the UK”. EU output also implies the abandonment of the customs union.
However, there is the expectation that will be negotiated a free trade agreement with the European Union that allows smooth the economic impact of Brexit for both parties. And, more important than the tariffs is the compatibility in terms of technical specifications and environmental requirements of traded goods.
The British market absorbed in 2015, 6.7% of Portuguese exports of goods, a share that has been growing steadily since at least 2011. in the past, sales to the United Kingdom accounted for 3,350 million euros and the balance was clearly positive for Portugal. Machinery, motor vehicles and transport equipment, clothing and footwear and food products are among the main Portuguese exports to the country of the pound.
The UK is the fourth most important market for Portuguese companies and in 2015 exports of goods and services to this country exceeded seven billion.
the British are also investors in Portugal. Last year, even were the second country that invested most in Portugal, with around EUR 582 million, although the Aicep data from the statistics of the Bank of Portugal, contabilizem the inflow of funds by the countries where companies have their headquarters, which inflates fiscally favorable geographic data, such as Luxembourg, which emerges as the largest investor in Portugal in 2015.
UK Trade and Investment data, which is the UK Aicep reveal also that there are 100 British companies to invest in Portugal. The UK’s leading investment focus on the sectors of the textile and wine to the north, and real estate and tourism , the south. The presence of British companies still have importance in the sector of the Power , with BP oil, the only multinational industry that is still in Portugal, and International Power, shareholder of companies operating power plants, Tubogas and Tejo Energia.
“I lie down with the UK within the European Union and woke up with the UK out,” witness Anthony Long, President of the Luso-British Chamber of Commerce. Although it was “a big surprise for everyone,” Antonio Long believes the impact will be more indirect than direct. Portugal may suffer the effects of an economic crisis in Europe and the UK, but the trade relations between the two countries will continue to be strong. “At the level of the chamber of commerce, we do not expect a major impact on bilateral trade,” says the observer.
The main effect, he adds, will be uncertainty on time and concrete aspects of the checkout process and this can be a brake on the development of new projects and investments already decided. “It’s a new phenomenon.” The size of the impact will depend largely on the shape and the time it takes to achieve the output and the modalities to be adopted by the European Union to relate to the UK. It will be followed by a solution comparable to that which exists in relation to Norway and Switzerland, “that have one foot inside and one out ?”
António Saraiva, president of the CIP, Business Confederation Portugal, told the Observer that is contacting all its members to realize what are the sectors of activity that may be more exposed to the UK. For now, no risks to identify any. Just as no one dares to do math while not know the actual conditions of output and the model that will define future relations between the European bloc and the United Kingdom.
It is the relevance of trade relations Paul Sande, professor at the Institute of Political Studies at the Catholic University, points out that, regardless of whether reaffirm europeísta of “assertive” way, the Portuguese Government “has to make its relationship with the United Kingdom”.
UK the output will necessarily have an impact on European policy and, consequently, the relations between Portugal and Europe. “ If there is no change, things do not stay the same, get worse” , ensures Paulo Sande. “Can not give up the main lines of European policy”, he says.
In other words, Portugal can not now expect that suddenly, Europe pass to be much more tolerant, or to change the limits for deficit and debt, which both have animated the debate on sanctions. “The fundamental rules of the Economic and Monetary Union, convergence, solidarity, budgetary requirements can not change from one day to the other,” says the former director of the European Parliament office in Portugal.
but Europe can take the shock to make decisions. “The 27 countries, and especially the 19 euro, have the opportunity to defend themselves taking measures to strengthen union”, said John Cherry, a professor at the Faculty of Economics of Porto. One hypothesis, for example, make decisions about the Greek debt, easing the burden of that Member State and showing solidarity.
Depending on this path is, or not followed, so will be the impact on Portugal and its relationship with Europe. Is that “the risk of dismantling is a big risk” , says the economist. “The Portuguese Government must be assertive in the European Union,” confirms Paul Sande. But it also has to “take care of your relationship with the UK,” adds.
For Miguel Monjardino, professor of geopolitics at the Institute of Political Studies at the Catholic University, the relationship between Portugal and Europe is in a dilemma deep: first, Germany loses one of its pro allies austerity. But there’s more. “The logic of the European Union and its current geography would dictate that the rules had to be reinterpreted to now favor the periphery. But to creditor economies, the economic incentive is the opposite, “ explains. That is, the political and economic interests are not aligned
“The level of financial markets, what we are seeing is a flight from risky assets. – Shares, debt peripheral countries, companies assets in the UK, very indebted companies – to other safer assets – the German debt, gold, dollar, yen, “anticipates Joao Pereira Leite, chief investment officer of Banco Carregosa, the Observer
Worse. “This is news to different impact than is the case when there are terrorist attacks, is more lasting “ guarantees. Hence the expert put completely now part of the event that the Government meet the GDP growth target (gross domestic product), registered in the State Budget for 2016 of 1.8%. “It is at this time a mirage”, he says.
“We deeply regret the decision of the United European Union exit Kingdom verdict that could not fail to cause high volatility in financial markets, among other possible impacts “reacted the Portuguese Banking Association (APB).
” the next time will be inevitable adjustment, given that it is an unprecedented context, “takes on the lobby Portuguese banking, although ensuring that the banks were prepared, “naturally,” for this contingency. “ sector will continue to ensure the provision to its customers, individuals and companies of all services normally,” says APB.
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