KITE Invest had the honour of recently meeting with the Ambassador of Spain to the United Kingdom, H.E. Federico Trillo at the Embassy in London. The Ambassador outlined the various reasons of why, “Spain is now once again a country to invest in,” and that Spain is bouncing back from the recession due to taking the appropriate measures and hard work. The involvement of the highest representative of Spain in the UK is a clear indicator of the strength behind Spain’s image and brand, especially in terms of its presence within the UK and its dynamic relationship with the British public, business and political spheres.
KITE Invest: As Spain appears to be on the right track how do you anticipate this positive growth to affect Spain’s relationship with the UK? Do you anticipate a greater deepening of relations as Spain re-emerges?
Ambassador Federico Trillo: Naturally, the current trend of economic growth in both countries will bring an increase in consumption and investment and this will clearly have a positive effect on trade. Cross-border investments between our two countries in recent years have been well below pre-crisis levels and this was because the financial position of companies was not sufficiently strong. Both Spanish and British companies were deleveraging and the banking system was not generous in providing financing. I am not talking about large multinational companies, but about other smaller companies, which were trying to invest internationally, but had problems in obtaining adequate finance.
Overall, Spanish exports of goods to the UK increased by 11% in 2013 in relation to the previous year, while exports of services increased by 7.6%.
Spanish imports from the UK decreased by 5.9%, while imports of services increased by 6.4%. I expect that, with the Spanish economic recovery advancing at a faster speed than was forecast some months ago, imports of merchandise from the UK will increase.
Investments from Spain into the UK amounted to 1,724.44 million euros in 2013, an increase of 754.4% with respect to 2012, while British investments in Spain amounted to 1,265.64 million euros, an increase of 45.5%.
The situation is now improving and the increasing flow of trade, tourism and investment between our two countries will continue to strengthen and increase the close links we have always had.
KITE: How has the crisis affected Spain’s brand and/or image, and in turn economic trade and investment relations with the UK?
FT: During the crisis, Spain was given a great deal of prominence in the British media and their assessment of the situation was not always a balanced one. Spain has indeed experienced difficulties, but the Government has taken the appropriate measures, even some that were quite painful for the population, such as the reforms of the pension system and the labour market. However, the fruits we are beginning to see show that the effort was well worthwhile.
Spain is now recognized as a country that has demonstrated a sufficient degree of responsibility to take these necessary steps, however difficult.
The reward is that the Spanish economy is now growing again. This year Spain’s GDP growth rate is forecast to be around 1.3% and could be even higher. Spain is now perceived in a much more positive light and has become a positive role model for other European countries with structural problems similar to those that Spain had before carrying out the reforms.
KITE: With respect to the specific sectors linking the two countries, which sectors does the Embassy anticipate as showcase great potential?
FT: We expect the traditional sectors such as the automotive industry, chemical products, and agribusiness to continue performing very well. Tourism is reaching figures that are higher than ever. Last year over 13 million British tourists visited Spain. New sectors are also gaining a presence in the British market, such as the digital industry and energy renewables.
KITE: What would you say is the most unique quality about the UK and Spain’s bilateral trade and investment relationship?
FT: Perhaps the most unique quality of the trade and investment relationship between the UK and Spain derives from the longstanding ties between the people of our two nations. If you look back to the trade statistics of the eighteenth century, Spain and Britain already had dynamic links, to the point where Britain was one of the main trade partners of Spain and Spain one of the main trade partners of Britain, and this has continued over the centuries. This mutual understanding and familiarity makes businessmen and companies feel at home in the other country. Spanish companies are in general very happy to trade and invest in the UK, which they think is a very open country for business and I trust that the British feel the same about Spain.
KITE: The Embassy and the Spanish Chamber of Commerce in Great Britain, recently launched the Spanish Financial Forum in London in order to generate a greater Spanish presence within the UK business and financial market, increase dialogue and a better awareness and perception of Spain within the UK. What was the catalyst behind the creation of the Forum and what measures will be taken to achieve its mission?
FT: The Forum is an institution that is independent from the Spanish Embassy, and was created as an entity in the Spanish Chamber of Commerce. The main purpose of the Forum is to facilitate reflection and discussion on financial issues. At this moment, the members of the Forum are high-ranking Spanish executives of financial institutions in the UK. All of them are very experienced persons with a good standing in the financial sector and I think their opinions and reflections deserve attention.
KITE: Part of the aim of the Forum is to serve as a platform to present a better perception of Spain. In connection to this aspect, how does the Embassy value communications as a tool to facilitate this effort?
FT: The Spanish Government is making a great effort to communicate the reality of Spain. One of the main initiatives has been the creation of a High Commissioner to promote the Spanish brand, “Marca España”, and the Embassy is in permanent contact with journalists, investors and opinion leaders in the UK.
Our job has been made much easier by the positive impact of the economic reforms carried out by the Spanish Government. Few countries in Europe can show such a comprehensive list of reforms as Spain can. Spain is now once again a country to invest in.