MADRID: Every working day, more than 10,000 people cross the border between Spain and the small British outpost of Gibraltar. That free movement of workers in both directions could be put in jeopardy under the terms of the United Kingdom’s exit from the European Union that’s schedule to occur in 14 months’ time. Come midnight local time on March 29, 2019, Britain will no longer be a member of the EU and may or may not have a deal in place to cover off all Gibraltar’s unique status.
Located at the very southern tip of Spain, just 13 kilometres from Morocco where the Mediterranean Sea meets the Atlantic Ocean, the outpost was ceded to Britain under the terms of the 1713 Treaty of Utrecht. Spain, however, has long-disputed the terms of that treaty signed more than three centuries ago, and covets Gibraltar’s return.
In the referendum on Britain’s future in the EU in June 2015, more than 96 per cent of Gibraltarians voted to Remain — a vote that was at odds with the overall Brexit result that set Britain on course to crash out of the Brussels-based economic and political bloc.
As well as being an important strategic naval and military base, Gibraltar is home to a thriving financial services sector. And because of its liberal tax laws, it is also home to internet companies specialising in web gambling and poker sites, with key servers being housed deep in tunnels burrowed into the limestone outcrop that’s also home to its famed Barbary monkey colonies.
There are 63 insurance companies based in the territory that use its status and EU membership to sell insurance across the bloc — and some 15 per cent of motorists driving on British roads now have insurance coverage from these firms.
While negotiators from the government of UK Prime Minister Theresa May are still hammering out the shape of a final Brexit deal, the government in Gibraltar says it will be able to pick and choose from that final agreement to best suit the territory. Classified as a “British Overseas Territory”, Gibraltarians elect their own government but foreign policy and defence matters are the purview of the government at Westminster.
Speaking in London late last week, Gibraltar’s Chief Minister said it could also ignore aspects of the Brexit deal that would be detrimental to the territory’s future.
“We will be able to determine whether aspects of what is agreed will be implemented in Gibraltar or not,” Fabian Picardo said. “It is clear that we do have a Brexit veto for Gibraltar.”
While Picardo was meeting with British officials, his deputy, Joseph Garcia was in Brussels meeting with EU officials. He said Gibraltar would not be a “whipping boy” to suffer the consequences of Brexit.
But he also took aim at Spain, who might be tempted to asset its territorial ambitions over the British territory.
Under the dictatorship of General Francisco Franco between 1936 and 1974, tensions ran high between Spain and the British outpost. It’s only since Britain joined the EU that tensions have eased, and in 1984 the frontier was reopened allowing some 13,000 people living in Spain to cross to work daily.
Gargia said that Spain had used the border crossing as a political weapon by implementing extensive checks, and that the European Commission had to intervene to smooth the flow. And after Brexit, Garcia warned that Gibraltar may not be so lucky and might not be covered by EU laws and protections.
The Spanish government, however, sees the Brexit talks and Britain’s decision to leave the EU as an opportunity to advance its claims on the territory.
“Whatever future agreement between the EU and the UK, there has to be an agreement between Spain and the UK for that to apply to Gibraltar,” Spanish Prime Minister Mariano Rajoy said in Brussels. “We also asked that this applies to the transition period.”
The Madrid government believes that Theresa May’s divided cabinet is too focused on trying to forge a deal and a future trading relationship with the EU27 right now, and may drop the ball when it comes to reaching a deal that’s best-suited for the 28,000 Gibraltarians.
“The British government have a moral obligation to ensure that Gibraltar is included in any transition deal should we leave the European Union,” Clare Moody, the Member of the European Parliament representing the territory said. “Leaving the customs union without a transition would be disastrous for somewhere that relies so heavily on its relationship with the EU,” the MEP said. “Theresa May and her government are the only ones who can make this happen, and it’s time for them to step up. If they fail, it will be Gibraltar that suffers more than anyone else.”
For Spanish authorities, however, Gibraltar’s tax-haven status fuels cigarette- and alcohol-smuggling rings, and they point out that that fact that there are 14,000 businesses registered in a territory of just 6.5 square kilometres speaks to the issue of tax evasion.
Those 13,000 workers who cross the border daily generally live in eight Spanish municipalities surrounding Gibraltar, and if the border is closed or the crossing impeded, it’s those areas that will be hardest hit.
It’s a reality that isn’t lost on the mayor of the municipality of La Linea de la Conception. It borders Gibraltar’s isthmus and is where the airport closest to the airport is located. Juan France has been at pains to remind Madrid of the reality on the ground. Around 25 per cent of his municipality’s Gross Domestic Product comes from Gibraltar and it’s where most of those 13,000 workers live.
France, however, isn’t holding his breath that the British and Spanish authorities will somehow manage to reach a bespoke deal that covers off Gibraltar. In more that 300 years of diplomatic sparring — and ever since the territory was seized from Spain in 1704 — Britain and Spain have yet to permanently agree on the five kilometres of shared waters in the Gibraltar bay.