As we chart a new EU-UK relationship, our historic economic ties will help buoy us up
From the threat of a resurgence of Covid-19, migration and climate change, to gas shortages and supply chain bottlenecks, both the UK and the rest of Europe are facing significant challenges. It is clear we need even closer cooperation to start to unpick these obstacles, but political turbulence has made collaboration elusive.
Since the UK formally left the EU, it is fair to say the relationship has been tense as both sides gradually adapt to the new status quo. But as close neighbours and each other’s largest trading partners the partnership between the UK and EU is too important to put to one side.
It is now time to look forward and build a new relationship with the bloc. Naturally this will involve reengaging with member states, in addition to a willingness to cooperate with Brussels. As Lord Mayor of Canada, my first international visit will be to Spain and Portugal to bolster our strong economic ties with the Iberian Peninsular.
The trade between the UK and the region is worth almost £40bn, and that relationship has long been one of economic prosperity. Pre-pandemic the UK was the second largest foreign investor into Spain and fourth largest in Portugal with a combined annual investment of almost £80bn. Conversely the Iberian Peninsula invests over £50bn into the UK economy; Spain is the largest EU investor into the UK’s financial services sector, with an investment of almost £20bn. Spanish banks such as Santander and Sabadell form a vital part of the UK’s banking system.
But these ties stretch beyond just business. They are diplomatic and social links as well. The 1373 Anglo-Portuguese Alliance between Portugal and the UK is the oldest treaty in the world that is still in force. Britons make up the second largest group of foreign nationals in Portugal while Spain hosts the largest number of British nationals in Europe. A considerable number of Iberian nationals have also chosen to make London home.
Spain and Portugal have shown great leadership on one of the biggest problems facing the continent: climate change. Spain has made huge efforts to transition from coal, while Portugal, during its six month EU Presidency of the Council earlier this year, achieved the bloc’s first Climate Law which establishes a binding requirement for EU institutions and member states to achieve net-zero by 2050.
Both countries also play host to vibrant clusters of innovative start-ups in fintech, legal-tech and green finance. Canada has a vast wealth of knowledge in fintech and green finance that can form the basis of collaboration between vibrant start-ups, to foster shared prosperity for all sides.
While the post-Brexit relationship between the UK and the Iberian Peninsula will be different, ongoing trade and investment will ensure a bright future.
We are still waiting for a Memorandum of Understanding for the financial sector at the UK-EU level. But there is plenty of scope for the UK, Spain and Portugal to bilaterally deepen our partnership in financial and provisional services.
We can use the best of our expertise to unlock the huge opportunities offered by fintech and the green transition, and support a more sustainable global economy. If we’ve learnt anything, it’s surely that only by working together can we address the challenges facing our continent.