Article in Cajasiete Blog, 17 august 2017.

Brexit: an opportunity for the Canary Islands?

Leopoldo Cólogan

Santa Cruz de Tenerife, east of Tenerife Island.

It does not require vast knowledge of history to know that before the European Union existed, the British had colonies of residents in Spain who had connections to the business and economic sectors, and as a result, elements of their own lifestyle, culture and language were handed down, such as football and golf, the entrepreneurial middle class and working class, as well as the English language itself.

None of these contributions should ever be lost as they are now part of our culture. They have enriched us and made us more competitive. Most importantly, the aim is to promote the use of English as a common language within the European Union, which has been greatly invested in, as it connects us with many parts of the world and makes us more appealing to British companies. It is no longer an obligation but a choice and, if you like, in honour of other member states such as Ireland and Malta. Besides the productivity of economic activity and the comfort of their homes, the primary concern of the colonies of British residents at the time was that which affected their daily lives: healthcare, their children’s education, law enforcement and legal certainty as well as leisure.

In fact, the above are essentially the same concerns that British residents in other member states of the European Union have, though with added complexity, as their ties to Europe are stronger and more intricate, given that instead of living in closed-off colonies, they have held citizenships granting them the right to move freely within a great space of liberty, security and justice, representing 18.2% of the World Trade (plus a further 3.8%, if the United Kingdom is included), without the need for visas, passports, borders, custom duties or other requirements.

“What forges great nations is individual effort.”

What forges great nations is individual effort. The collective is usually fearful and distrustful of its own possibilities; it tends to fear others taking away what it has, and it only takes a few to intimidate many, unless a leader’s personal efforts, organises them and makes them greater.

A clear example is the Royal Navy of the 18th century, which was made great, on the one hand, by the willingness to sacrifice, individual effort and the determination of its leaders, who set the example and imposed harsh punishments when, due to harsh conditions and the length of voyages, riots occurred and, on the other hand, thanks to the poorly recognised General Antonio Gutiérrez de Otero who, undersupplied and outnumbered, defended Santa Cruz de Tenerife against the British attack in 1797, commanded by Vice Admiral Horatio Nelson, whom he beat with intelligence, strategy and dignity, which Nelson himself recognised in a letter in which Gutierrez de Otero’s humane treatment of the casualties of the battle was recognised.

As the leader of Brexit negotiations, it is now the challenge of former Commissioner Michel Barnier to make the European Union great, setting out from three basic premises: first, the part that each party represents in world trade, second, that it was the British who formally requested their exit from the EU on 29 March 2017 and, third, the principle of reciprocity in respect of future visitors and residents of the remaining member states in the United Kingdom as well as the possible rights to be granted to the actual residents.

On the other hand, we are forced to live together and to come to an agreement, there are many ties that unite us and trade has always found ways to overcome political difficulties throughout history. I had the chance to listen to Simon Manley, British Ambassador to Spain, who believes in the power of free trade and the power of companies to generate wealth; the intention is to build on mutual cooperation with regards to matters of public interest, such as terrorism.

At this point, what role could the Canaries play? This will depend on the individual efforts made by each of the various stakeholders: politicians, entrepreneurs and professionals.

It is clear what the United Kingdom represents to the Canary Islands to the extent that the repercussions of Brexit are referenced in Act 3/2016 of 29 December regarding the 2017 Budget for the Canary Islands, which states that “the main area of impact on the Canarian economy, which is tourism, will in all likelihood not see immediate effects in the British tourist trade until well into next year, considering the forward-looking nature of British holidaymakers who have already booked their holiday for the summer period and, to some extent, the winter period.”

Moreover, the 4,800,000 British tourists who visited the Canary islands in 2016, not including cruise passengers, are testament to the fact that they need to travel to places with warm and sunny weather in order to relax and build up their energy resources for the rest of the year, with these trips positively influencing Britons’ state of mind and productivity.

Nonetheless, it is not solely a question of tourism or the export of Canarian products (such as legumes), but rather the roles that the United Kingdom will no longer fulfil when it exits the European Union. So, why not take these over? Let us become a point of reference for scientists in the European Union or a new arbitral and judicial headquarters for international conflicts, the latter being a topic that I am addressing with my project ‘Leopoldo Cólogan – Law Hotel’, and let us cover any other needs that may arise.

500 Spanish companies are active in Great Britain and 700 British companies operate in Spain. As a result of Brexit, the Spanish Securities and Exchange Commission has launched a set of measures geared at attracting finance companies based in the UK who are seeking to relocate their business or part of their business to Spain, as per the Bank of Spain’s assignment published in the Official State Bulletin (BOE) on 13 April 2017. The new location of the new headquarters for the European Banking Authorities and the European Medicines Agency is currently under discussion.

What tools do we have in the Canaries that we can use to encourage companies to relocate? Act 19/19924 of 6 July, amending the Economic and Fiscal Regime of the Canary Islands as an outermost region of the European Union with the Special Canarian Zone, where – respecting the principle of growth on the basis of isolation – foreign companies and assets attracted by the inherent advantages of this type of zone can relocate, and a corporate tax rate of 4% will help drive the economic and social development of the Canary Islands.

The Special Canarian Zone (ZEC) embraces the potential development of activities related to the food and textile industries, production of pharmaceutical, IT, electronic and optical products, collection and treatment of residual water, cinema, telecommunication, legal services, accounting, consulting, architectural and engineering services, research and science, tour operators, education and healthcare.