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Spain has said the British banks will not be able to operate in the EU after Brexit

The treasurer of the British Chamber of Commerce in Spain, Eduardo Barranchina, warned about the devastating impact facing British banks if they are unable to replace the current so-called financial passport, to gain entry into the EU.

Eduardo Barranchina appeared yesterday before the Mixed Commission of the European Union to inform on the consequences of the exit of the United Kingdom from the EU, and said the current uncertainty is the future on trading relations.

‘The current framework which regulates commercial relations will have to be substituted. Brexit means the exit from the single market’, he signalled and then had words for the grand majority of Spanish businesses ‘be calm and don’t act nervously’ as only 2% are considering leaving the UK

‘The joint work of the Chambers of Commerce will continue until circumstances force a change’ he recalled, but the consequences would be enormous for all without the financial passport, unless they open a subsidiary body inside the EU, as is being seen.

He considered the only alternative would be for the British banks to continue offering services inside the EU with an agreement based on equivalence under the joint supervision of countries.

Barranchina alluded to another possibility to establish a new financial passport restricted to ‘The City’.

Elsewhere, he noted the British Government want to establish a new model of trading relations with the EU taking into account that both economies are already harmonised, and should not be anchored with tariffs, however he warned with only two years, the overriding rules would be from the WTO, which would signify Spain having to pay some form of duty to sell their products inside the UK.

He also warned about the possible economic events regarding tourism and immigration, given Theresa May has undertaken to keep immigrant arrivals to under 100,000 a year should she win the election.

However, Barranchina noted ‘ the British Government seems calm over the matter, ‘there is no hostility being shown over the departure’ and he hoped this will lead to a ‘consensus’ so all the European citizens with more than five years residency can opt for permanence.

Lastly, he asked the Spanish civil society living in Great Britain, to strengthen the relationship between Span and the UK as this change represents ‘an extraordinary opportunity’ given the Official State visit by the Spanish Kings in July.