How the economies of the UK and Gibraltar are coping with Brexit

“HOW many angels can dance on the head of a pin?” is said to have been the subject of scholastic debate in the Middle Ages and has since been used to denote wasteful discussion.

In these articles I have tried to be as evenhanded as possible and last week I put the spotlight on the monumental legal implications of removing European citizenship from 63,764,710 (plus 30,001 in Gibraltar) British nationals. Frankly, I do not see how it can be done.

Still, I also think that the UK will leave the EU, so what wasteful discussion do I want to talk about?

To quote Hillary Clinton’s husband “It’s the economy, stupid”.

The apocalyptic shrieks of the losing side in the June 23 referendum that the UK and Gibraltar economies would collapse have so far not materialised.

The UK still has one of the lowest unemployment rates in the EU (after Gibraltar) and consumer confidence remains high – things which cannot be said of much the rest of the EU.

I am not saying that the situation might not deteriorate and the Private Frazer doom-mongers might eventually be proved right, but I personally do not think so.

So, what has the EU done for Gibraltar and how has the Brexit referendum result affected this Britain in the Sun so far?

Bearing in mind that we joined the then European Community in 1973, Brussels’ impact on Gibraltar was often negligible and sometimes negative.

Thus, residents of Gibraltar were only able to vote in EU elections after Miss Denise Matthews took out court proceedings in 1998.

There has always been a strong suspicion that Spanish commissioners and MEP’s have used the European institutions to harass Gibraltar.

Whether this is true or not, is not for me to say openly (although I have my own views), but the behaviour of the until recently EU Commissioner responsible for Economic and Monetary Affairs, Joaquin Almunia and the MEP Ramon Jauregui should be noted.

Particularly so given the sharp focus on Gibraltar whilst the EU has cheerfully given clean bills of health to competing jurisdictions including Dublin, Luxembourg and Andorra.

I for one believe that the strategy of the Spanish Foreign Ministry was to use the EU institutions as a rod for Gibraltar’s back and that the referendum result may have caught the Palacio de Santa Cruz by surprise for more reasons than one.

Scouring for economic data to see how things are going in Gibraltar I have spoken to many who, despite their worries, seem to back up the analysis that there is life after Brexit.

Indeed, the threat to Gibraltar’s economy and that of the entire Campo de Gibraltar in Spain may have little to do with a Brexit and very much to do with whether the new incumbent at the Spanish Foreign Ministry thinks that he or she can make use Britain’s perceived weakness to make the umpteenth attempt since 1704 to take over Gibraltar.

So, could the UK and Gibraltar continue to be havens from the gales that are buffeting other parts of the EU?

Only time will tell. The Prophets of Doom gleefully point at the claims that London based banks have drawn up contingency plans to leave the metropolis in case of something called a “hard Brexit”.

Of course, all companies are always making contingency plans – that is what competent company directors are paid for.

I spoke to a respected operator in the financial services industry in Gibraltar the other day.

He says that whilst he is of course concerned about the uncertainty going forward, he is even more worried about the over exuberant anti-Brexit narrative which could end up as a self-fulfilling prophecy.

I have had similar reports from people involved in tourism and real property.

As at early November 2016 therefore all indicators continue to point to business as usual and whilst over optimism is not recommended, neither is excessive pessimism.

In economic matters more than most, nobody can predict the future and regrettably, because we all crave for certainty, much of the current debate is speculative.