Brexit could complicate the delicate balance between Britain and Spain over Gibraltar
In June last year the first result to be declared in Britain’s EU referendum was from Gibraltar, the tiny British overseas territory on Spain’s southern coast, with an estimated population of around 30,000. The result was a resounding victory for the remain-in-Europe campaign: nearly 84% of voters turned out, and 96% of them voted in. The result was hardly surprising. While most residents of Gibraltar are British passport holders (following legislation in 1981), the territory is very interlinked with that of the European Union, and Spain in particular; its status as an offshore banking centre, thanks to its low-tax environment, is boosted by its membership of the EU. Even before the referendum there were warnings that Brexit could complicate the delicate balance that had been struck between Britain and Spain in recent years over the thorny issue of the “Rock”, as it is often known.
A British outpost in Europe
Gibraltar is a British overseas territory, ceded to Britain in 1713, one of 14 such locations dotted across the globe, though the only one to be part of the EU single market (it is not part of the customs union). The population has been resolutely committed to remaining in Britain, when offered the choice in past decades. In 1967, a referendum on whether to pass under Spanish sovereignty or retain their link with Britain resulted in over 99% voting in favour of the latter option. A second referendum held in 2002, which proposed joint sovereignty with Spain, was also rejected by 98.97% of the voters.
Over the centuries the relationship between Britain and Spain over Gibraltar has been marked by tensions, with various developments (such as an early visit by Queen Elizabeth in the 1950s, and a 1965 “red book” published by Spain that accused Britain of imperialistic advances) stoking the situation. Modern tensions reached their height in 1969 when a new constitution of Gibraltar declared that it would remain a part of Britain’s dominions. The Spanish dictator Francisco Franco shut the border, which remained closed till 1982, several years after his death.
EU membership of both Spain and Britain has influenced the treatment of Gibraltar in a number of ways, says Richard Whitman, head of the politics and international relations at Kent University and a senior fellow at Chatham House. “When the U.K. joined the European Economic Community, it got the principle accepted that Gibraltar was in effect part of the U.K.’s accession to the EU. The U.K. used EU membership to normalise the situation and not make it anomalous in anyway,” he says, adding that when Spain did join the union, it implicitly recognised the status of Gibraltar.
EU, U.K. and Gibraltar
Despite the clear role that the EU played in stabilising the situation, it was accorded limited attention, in Westminster at least. The White Paper outlining the British government’s position on Brexit, published in February, made brief mention of Gibraltar, noting that it had particular interests and was not part of a customs union. However, it was not referred to in the formal letter Prime Minister Theresa May sent last week triggering Brexit talks.
“One of the great complaints in Gibraltar has been their anxiety that they are not being taken seriously when it comes to the special circumstances of what they stand to lose by exiting,” says Professor Whitman. It’s a message reiterated by some politicians: over the weekend Clare Moody, the Labour Member of European Parliament for the South West and Gibraltar, told the BBC that the failure to include Gibraltar in the triggering letter highlighted the lack of recognition being given to it by Britain, something that she said risked hurting not just Gibraltarians, but also the thousands of Spanish people who came across the border to work on a daily basis.
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Over the past week, Gibraltar has suddenly surfaced as a major issue of contention following the EU’s draft negotiating guidelines’ inclusion of a reference to Gibraltar. “After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom,” the document reads. The draft is set to be discussed and approved by member states at a meeting at the end of the month.
In reality, the document simply states facts: when it comes to negotiating any post- Brexit deal for the U.K. and its territories, Spain, as a member of the EU, would have always had a veto.
However, that has not stopped the sabre-rattling in the U.K. “Up Yours Senors!” declared the right-wing newspaper The Sun, that campaigned heavily to leave the EU, while a former Conservative leader, Michael Howard, went one step further, essentially suggesting that Britain would be willing to defend Gibraltar by force, likening what Ms. May would be willing to do to how Margaret Thatcher went to war with Argentina over the Falkland Islands in 1982. Spain, for its part, has expressed bafflement about the hype that the issue had generated in Britain.
A foretaste of the future
The developments highlight a number of things: from the early days after the referendum, the British government has stood accused of not being prepared to face the very complex issues that Brexit would bring to the surface — from the status of Northern Ireland and Scotland to the plight of individual industries. Gibraltar would seem to be yet another such example.
It also highlights the dangerous, nationalist rhetoric often being invoked by politicians, within and outside the government, as Britain prepares to leave the EU. “It reeks of 19th century jingoism,” former Labour Minister Jack Straw told the BBC on Monday, noting that not even Franco had resorted to discussing military force as a means of resolving the Gibraltar issue.
For now, tensions have subsided somewhat, and Prof. Whitman says he is at least optimistic that both sides will have to commit to finding a solution that works in everyone’s interests. Getting a right deal on Gibraltar is important for Spain as much as it is for Britain: providing a source of employment to a deprived part of Spain. It will also be keen to reach a deal that tackles Gibraltar’s low-tax status, which it says is detrimentally impacted, and has long been one of the issues of contention. Britain, for its part, will be acutely aware of the role that Gibraltar’s combined membership of the EU and its tax status has on its economic success (it could lose out to other low-tax EU economies such as Luxembourg) and how it would struggle to peg its future on the “great trading nation” that Britain says it strives to be as it exits Europe.
Says Whitman, “It’s a question of how integrated the EU wants the U.K. to remain and for the U.K. to decide where it trades off this desire for sovereignty against a need to preserve so much of what it has.”