Life in Spain in 2021

2020 was a year like no other, and 2021 brings with it unprecedented challenges for Spain, and for those living in the country. From securing the Covid vaccination to dealing with the aftermath of Brexit, welcoming tourists back to the country to coping with the closure of several large national banks, 2021 is already set to be a year to remember. Here are some of the main changes and challenges that are set to impact life in Spain throughout 2021, and everything you need to know about how they might impact you:

The Ongoing Coronavirus Crisis and Response

With many countries (notably the UK) in the grips of a Third Wave of Coronavirus, there is much talk in the Spanish press about if and when this Third Wave, or “tercera ola” will reach Spain, and the impact it may have. At this point, however, Spain has fewer cases of the virus than many other European countries. In other positive news, the first Spanish residents received the Coronavirus vaccine in early January: the country received its first major shipment of more than 350,000 doses of the Pfizer/BioNTech vaccine and began administering these immediately. Whilst there have been some hiccups in the rollout of the vaccine, it is expected to be much more widely available as the year goes on.

The vaccine is essential, as it is considered the route most likely to restore normalcy to Spain in 2021. Whilst no official figure of how fast the vaccination process will take place has been released,  a statement made by Prime Minister Pedro Sanchez in late November said that Spain will have vaccinated a large proportion of its population by the middle of the year. Spain is to keep a register of its residents who refuse to be vaccinated against the Corona virus, and will share this with other EU member states, which could impact on your ability to travel across Europe, and which is something to consider when deciding if you will receive the vaccination, when it is offered to you.

Welcoming Back Tourists

If you’re already living in Spain, you may be wondering when tourism will return to your region, and if you’re not living in Spain you’re probably desperate to get to your favourite Spanish beach for a relaxing holiday. The good news is, Spain does expect to welcome back tourists in 2021. In December, the Spanish Government announced a new ‘travel safe’ scheme, in a bid to both reassure tourists, and encourage them to return to Spanish shores.

This doesn’t mean that tourists returning to Spain is guaranteed: much of this will depend on the vaccination programme mentioned above, as the country being opened to tourists doesn’t mean it may not still be on the no-travel list of many countries. But, looking to the future optimistically, this is expected to change by the summer.

The Impact of Brexit

The United Kingdom has officially left the EU and the Brexit process is complete. This was a sad day not only for many British citizens living in the UK, but also those Brits who choose to call Spain their home too. Practically, British citizens currently living in Spain will have a few more hoops to jump through (including applying for residency cards) and it is expected that making the permanent move to Spain will be markedly harder for Brits in the coming months, although the exact details of what this will look like in the Brexit agreement are yet to be announced.

What we do know is that the requirements in terms of income, the level of health cover you secure, and the amount of time you spend in Spain are set to become much more stringent. And if you are a second home owner, or just spend long periods of time in Spain (as is common for many Brits during the winter months) then the rules are also expected to change from the 90-day limit that is currently in place to having to apply for a ETIAS visa waiver to enter the country and further setbacks relating to their status as third-country nationals.

The Unstable Spanish Economy

The current covid situation has left the Spanish economy, just as many other European and World economies, in a slightly more unstable position. In October, the International Monetary Fund reported that Spain would end 2020 with the worst-hit economy in the world and a GDP drop of 12.8 percent. However, the forecast for the Spanish economy in 2021 is much more positive, particularly now the nation has a vaccine in its sights, and tourism is set to return.

CaixaBank Research predicts a GDP growth of 6 percent and the Bank of Spain has given a growth range of between 4.2 and 8.6 percent. Whilst the rise is not as steep as the fall, and there won’t be a V-shaped growth for the Spanish economy, it does seem clear that the numbers will go in the right direction by the end of 2021, although the difficult economic period will be hard to bear for many right now.

What is perhaps most concerning for many Spaniards of working age is what will happen, economically, when the current furlough scheme ends. The ERTE scheme has propped up Spain’s job market since March 2020, but this is due to end at the end of January 2021. At the end of this period, it is predicted that Spanish unemployment will rise slightly, from 15.7 percent to 16 percent. Unemployment is not forecast to be anywhere near as high as it was during the last financial crisis, but nevertheless, which an economy that depends so strongly on tourism, there are sure to be many people worried about their job security throughout 2021.

Fewer Bank Branches

It would be easy to blame it on the pandemic, but in what is just as likely to be an exercise in cost-cutting, many different Spanish banks will close thousands of their branches in 2021.Santander has recently announced that it will shut 1,000 offices this year in addition to the 4,000 bank branches already announced to close between 2020 and 2021. Many of these closures are a result of the Caixabank merger with Bankia.

From a practical point of view, this means many people in Spain are going to have to travel further or switch to banking online, a consequence which has been deemed particularly discriminatory for the elderly and those living outside of big cities. This will put extra pressure on many people who are already struggling in a stretched Spanish economy.

Are you thinking of moving to Spain? Or perhaps you’ve always wanted to own your own Spanish holiday in the sun? Well there’s no time like the present! Why not get in touch with our local property experts, who are perfectly placed to help turn your dreams of Spanish homeownership into a reality.