Spain would suffer if it vetoed a Brexit deal over Gibraltar

Spain would suffer if it vetoed a Brexit deal over Gibraltar

In the draft negotiating guidelines issued by the EU, it appears that Spain will be given a veto over a Brexit deal in respect of Gibraltar.

If Spain did veto such a deal, it would be bad for Gibraltar – but it would be terrible for Spain.

Gibraltarians fear being held to ransom by Spain during the Brexit negotiations. Older Gibraltarians remember the stress they suffered when Franco closed the border in 1969 and everyone remembers the scenes from 2013 when Madrid bullied Gibraltar by severely restricting people’s movement across the border. Even today, the Spanish border guards will occasionally act capriciously and cause delays.

The result of the overbearing bullying by Madrid has been that Gibraltarians are perhaps the most patriotically British citizens – everywhere you go in Gibraltar, you will see both Union Jacks and Gibraltar flags hanging out of windows and in community buildings. Gibraltarians are not, and never will be, Spanish.

Gibraltar still gets most of its investment, defence and expertise from the UK. Its laws are based on English laws and its taxes are low by virtue of being a British Overseas Territory. It has built up industries (e.g. ship bunkering) that do not rely EU membership and others (e.g. financial services) that can adapt well to a post-Brexit world.

For Spain, however, a bad Brexit deal would do real harm. Spain is only now recovering from the financial crisis and has finally returned to growth. Whilst unemployment is falling, it is still at 20% and youth unemployment is around 40%. The Cádiz province, which borders Gibraltar, is one of the poorest areas of Spain where unemployment is around 35%. Whilst this is down from around 42% in 2014, this is an area that desperately needs economic growth and investment.

So why does Gibraltar matter to the Spanish? Simply put, Gibraltar is a huge economic boon to southern Spain. The territory employs around 10,000 people living in Spain, mainly service sector workers. But there are also many young professionals: accountants, teachers and lawyers. These people bring nearly €100 million into Spain every year.

Gibraltar also buys over £380 million in services from Spain and the quirky airport ensures thousands of British tourists have another way of getting to southern Spain. Overall, from 2009 to 2013, Gibraltar increased the GDP of the Campo de Gibraltar region (the part of Spain that immediately borders Gibraltar) by £554 million.

Would Spain really risk the huge amounts of money that flow into Cádiz over the British-speaking Rock? Would it really impoverish a whole region still struggling after the economic crisis?

Both the British and Gibraltarian governments want a constructive deal with Spain. Both want to ensure that trade can continue, both want the free movement of workers and both want to continue the security arrangements to fight terrorism and organised crime. But most importantly, both want a good relationship with Spain after Brexit – but any deal that demanded Britain surrender Gibraltar against the wishes of its own people would simply not happen.

So does Madrid really want to risk the jobs of 10,000 of its own residents and €500 million flowing into Spain?

I sincerely hope that it doesn’t, but if it did, the Spanish Government would be causing itself a great deal of harm.