With less than one month to go until British voters decide the future of the UK either in or out of Europe, the Algarve Resident asked five Brits who live and work in the Algarve for their take on the Brexit. Our objective was to seek the opinions of well-established businesspeople within the community, each of a different profession, asking them to express their thoughts on how a possible Brexit could affect business in the region and the livelihoods of British residents.
Profession: Real estate agent
Position: Sales Director and Partner, Cerro Novo Property Sales and Services
It’s totally understandable why many in the UK might seriously consider voting to leave the EU, especially due to the apparent lack of transparency and accountability in terms of EU expenses, as well as absurd laws and regulations that are enforced. But there are many reasons why we’re obviously better to influence from within rather than being impotent out, as well as enjoying the continued ease of travel and residence in our wonderful Algarve home! All of us get frustrated by the bureaucracy, but realise how privileged and lucky we are by being accepted by the Portuguese while enjoying an amazing quality of life.
So far some investors have recently been hesitant to purchase properties until the vote in June, but many are just waiting for the Pound to strengthen.
We all know that the Portuguese authorities will continue to want to encourage the British to invest, reside and spend holidays here. There are also many Portuguese citizens residing in the UK and everything will be done by both the British and Portuguese authorities to maintain reciprocal health and residence issues, as well as increasing trade between our countries.
One of the worst scenarios of a Brexit would be the British Pound initially losing value, which could discourage investment as well as the start of a probable breakup of the EU. This could completely destabilise Europe and cause incalculable political and economic issues. It could also seriously limit demand and therefore the growth of the tourism industry as well as harm our strengthening property market.
On the positive side, us happy residents will still enjoy the peace and tranquility of “Europe’s best kept secret”!
Position: CEO, Open Media Group
There is obviously the fear that the Pound could weaken against the Euro and this has always had a negative effect on us here, on everything from money in the pockets of British tourists, to property sales and less money for UK pensioners living here. But many experts are of the opinion that the Euro would also lose value in the case that the EEC is deprived of its second largest net contributor. So we could well see both the Pound and the Euro sliding in value against the Dollar which would have no negative effect on us here. My fear of a Brexit is that it could spurn the break-up of Europe as we know it, with Greece being the next to exit and the effect this could have on the European economy in general and, specifically, the onset of another recession in the UK. As we all know, when Britain catches a cold, the Algarve gets flu.
As for the status of Brits living and working here, there is no reason to expect anything to change. There are more Europeans living and working in Britain than there are Brits in Europe so a reciprocal agreement to maintain the status quo is a no-brainer.
We also need to keep in mind that Swiss nationals have always been welcome to holiday, buy property and live here in Portugal, so there is no reason to think that British nationals would not be treated the same. I have lived here since the late 70s and started working in the publishing business in the early 80s, and remember well the property boom of the mid-80s that started before Portugal joined the EEC in 1986. So, summing up, my opinion is that a Brexit without a subsequent recession would do us little harm. But I fear that a recession may be inevitable and the fragile state of the economy makes a Brexit far too risky.
Profession: Communication Design Professional
Position: Founder and CEO, Atelier do Sul
What’s Brexit? Being fortunate enough to have lived and worked in Portugal for the past 40 years or so, quite honestly I do not keep much up to date with UK news, and even only very recently did I get a TV system that has UK channels. The first time I heard the word must have been on Portuguese TV, where I do watch the news daily. My immediate thought as a communication design professional was, “what a good brand name for a breakfast cereal!”
However, yes, I found out it was just another acronym, as is so common nowadays, from Watergate, to Spygate (Formula 1), then to WikiLeaks etc.
Asked by the editor of the Resident if I would write a few words about what I think of Brexit, I explained that I am not a well-informed contributor on the subject, but as the request from the Algarve Resident was to look at it as a Brit living and working in Portugal, I succumbed to put down these thoughts.
The answer I feel is pretty simple – no one really knows! And certainly not the man on the street. All he knows is what the politicians want him to think (read vote).
And what is my opinion? Well, even being ill informed, I do consider myself as a unified Europe advocate, unified for internal and external trade, in particular with world scale economies like the USA, China etc., freedom of travel and currency. The more fractured Europe becomes, the weaker Europe becomes and the weaker each nation within becomes. Economy of scale = a big Europe is a better Europe.
Finally, after such a prolonged and deep recession that many of us are still wondering how we survived, the last thing we all need is something to destabilise what we have managed to get going again. Please, no to Brexit.
Profession: Leisure Resort Management
Position: Managing Director, Boavista Golf & Leisure Resort
The lack of impartial and clear information of the implications, benefits and possible risks associated with both the in or out position are being replaced by rhetoric and scaremongering and this is contributing to the current uncertainty.
The complexity of the matter is such that it can be questioned whether the elected responsible parties are neglecting their decision-making duties by even holding a referendum at all.
For those living and working abroad, the key areas of concern would appear to be the effect of withdrawal on exchange rates, EU health care and benefits, taxes and mortgages, pensions and visas.
One thing is for sure, the foreign exchange markets hate uncertainty and that has been reflected on the value of the Pound since the announcement of the referendum. A Brexit will bring at least two more years of further uncertainty whilst the terms of the withdrawal are negotiated.
On the other hand, should the vote choose to remain, the Pound is likely to rally against both the Euro and Dollar. The relative safety of Portugal is seeing an improved number of visitors from all countries. However, the level of spend from UK visitors is being affected by the poor exchange rate.
Moreover, UK individuals are showing hesitation in making a decision to purchase property not wishing to commit without knowing the result.
If the pollsters are sitting on the fence not wishing to give a prediction on the outcome, a look at the most popular betting rates show that the odds are in favour of the UK remaining in the EU.
The reaction from the various EU authorities and member states is also unknown and may create a vindictive feeling towards Britain. All of this may be surmountable in the long term, however the short to medium term is unlikely to be positive. It would appear the advantages of remaining an active member of the EU outweigh those that may occur if the UK withdraws.
Profession: Financial adviser
Position: Senior Partner, Blevins Franks
No one can say for sure what will happen following a Brexit. What we do know is that Britons already living in Portugal will keep the right to stay, just as non-EU nationals do now.
The EU is not the only authority within Europe. Even if an EU nation becomes less accommodating to Britons after a Brexit, they still have to respect individual property rights, for example, thanks to international human rights law. The UK-Portugal double tax treaty is also independent of the EU, so any existing tax treatment should be unaffected.
Given how much expatriates contribute to the Algarve economy, it is likely that the authorities will want to make sure Portugal remains an attractive place for Britons to invest and relocate. We expect this would result in new agreements between the UK and Portugal to extend current benefits beyond Brexit.
As for investments, there will be no impact for expatriates whose interests are focused outside the UK, such as our clients. Brexit or not, Blevins Franks’ clients can rest assured that we will continue protecting their wealth as before.
Even if Britain votes to leave, nothing will change immediately. It could take several years to work out Brexit terms. This gives expatriates plenty of time to consider how they will be affected long before anything changes. It is a good idea to seek professional wealth management from a firm with expertise and a presence in both countries to make sure you are in a good position to protect yourself, whatever happens.
Disclaimer: The information provided and opinions expressed by the contributors to this special Algarve Resident feature on the upcoming Brexit vote should not be construed as advice and do not necessarily reflect the views of this newspaper.