KITE Invest had the pleasure of sitting down last month in London with Lord Daniel Brennan, Chairman of the British-Spanish All-Party Parliamentary Group and former President of the Canning House to discuss the longstanding history, the strategic importance and mutually benefitting economic relations.
KITE Invest: The Spanish economy is currently on track to re-emerge, as made evident by the positive economic growth over the last three-quarters after a few years of negative growth. Despite the crisis’ negative effect on the perception of Spain, it must be noted that Spain is still the 4th largest economy in the Eurozone. Taking these points into consideration how do you foresee this positive growth in terms of the relationship between Spain and the UK?
Lord Brennan: I am confident that Spain will continue to grow slowly, but positively. Its development is going to be tied to the prospects for the country itself, its participation in the Eurozone, as well as, its trade relations with the United Kingdom. Spain as an exporter not only within the European context, but also, with Latin America and others has shown over the last year an export performance that has been as good as, if not better than, any other country in the Eurozone.
KITE: How would you classify Spain’s brand and image today?
LB: Whenever you have a recession as deep as the one we have had, it’s essential for countries to maintain their own sense of self-confidence. When one uses the word ‘brand’ in the context of Spain, we are not simply talking about tourism as established sources of wealth, but also, the way it has developed.
For example, Talgo, a Spanish rail company that created the AVE, has a major contract in Kazakhstan, is currently in deals with Saudi Arabia and has significant potential in Latin American contracts. This is a longstanding Spanish technology company with a high-class product, which is selling to the world. There are many other examples of Spanish success stories, and these stories for me are the best evidence of a brand and the best way to advance the brand.
Applying this to simple marketing terms, the key point is that Spanish business works abroad and this is, to an extent, how the country can get over its past economical difficulties in this recession.
KITE: In terms of British-Spanish trade and investment relations, there are few statistics that underscore the extent of this relationship. For instance, Spain is the UK’s 8th largest export market, with exports to Spain exceeding that of UK’s exports to Brazil and India combined. Also, the UK has been Spain’s first destination for investment, with investments totaling more than the whole of Latin America combined. As the country emerges out of the crisis are there any areas of growth that present interesting opportunities between the two nations?
LB: It is important to emphasize that trade and business between Spain and the United Kingdom goes both ways. In terms of Spain in the UK, first of all there is banking, as Banco Santander took over one of our major building societies and is now probably our fifth or sixth ranking bank. BBVA is well established in this country as well. Ibredrola is a major energy supplier in the United Kingdom. Ferrovial runs major airports, in particular Heathrow. Thus, as you can see there is huge Spanish investment inside the United Kingdom, and moreover, the kind of investment that is long term.
In terms of what the UK can do in Spain, I regard this as a balance of interest between the two countries. There is a flow of money, investment and business going each way. As far as the UK is concerned, there are already hundreds of British companies in Spain and Spain has a tremendous market to offer in terms of skill and innovation.
We have got to understand that Spain has a positive skill story to tell. It’s not happenstance that big motor companies have major plants in Spain. It’s the fact that ITP, the Spanish aircraft engine maker, is a company with substantial shareholding by Rolls Royce, because they make Rolls Royce equipment as well.
The examples I have mentioned illustrate serious investment capacity and some targeted sectors that are going to be priority areas for business and innovation over the next five to ten to twenty years. There is plenty that Britain can do in Spain, just as much as Spain is doing in Britain.
KITE: As the Chairman of the British-Spanish All-Party Parliamentary Group please shed some light on the goals of the Group in as far as promoting these key business alliances we have discussed between Spain and the United Kingdom.
LB: As I recollect Spain was one of the first countries to send an ambassador to the United Kingdom in the 15th or 16th century. As a result, there has been a relationship stretching over 500 years and the foundation for this relationship is geography and self-interest. Both are countries that look out to the Atlantic and therefore, both are used to international development and trade. Spain and the UK are both adventurers into the world outside, because we are on the edge of Europe, we are to an extent looking into Europe.
On plenty of occasions in the past and no doubt in the future there will be an axis of interest, which joins Spanish and British interests within the European Union. Looking out to the world of trade beyond Europe and looking into Europe, there is every reason to support those with common interests and geographical placement in order to ensure that the two are as close business partners as possible.