17 May, 2024 @ 14:00
2 mins read

Gibraltar post-Brexit deal hopes dashed in latest summit: Spanish FM says there are ‘no insurmountable obstacles’ but Andalucia blames ‘tax haven’ Gibraltar for ‘degrading’ the Campo’s economy

THE latest round of talks in Brussels to resolve the issue of Gibraltar’s status post-Brexit ended without a deal.

Gibraltar Chief Minister Fabian Picardo spent six hours meeting with UK foreign secretary David Cameron, his Spanish counterpart Jose Manuel Albares, and European Commission Executive Vice-President Maroš Šefcovic.

In a joint statement the four parties said they had built on the ‘significant progress’ of the last meeting on April 12.

“Today’s discussions took place in a constructive atmosphere, with important breakthroughs and additional areas of agreement,” it said. 

READ MORE: Brexit deal latest: Many complex hurdles for Fabian Picardo to overcome as UK fears losing sovereignty and Spain worries ‘tax haven’ Gibraltar will ‘colonise’ el Campo

David Cameron (left), Fabian Picardo (centre left), Spanish Foreign Minister Jose Manuel Albares and European Commission Executive Vice-President Maroš Šefcovic.

“All sides are reassured that the agreement is getting closer and will work closely and rapidly on outstanding areas towards an overall EU-UK agreement.”

Hopes had been high that a deal could be struck before the European Commission takes a hiatus during the upcoming European elections.

There was also impetus to secure a deal before the added complication of the UK’s general election this year, which is almost certain to usher in a new government.

The proposed deal would see the hard border between Spain and Gibraltar removed to see the free movement of goods and people.

The issue of the airport is thought to have been overcome, with el Pais reporting that it would be administered by the EU’s Frontex border staff ‘under the supervision of’ Spanish security forces.

It was this potential arrangement that prompted a UK select committee to warn of a ‘diminution of British sovereignty’ over Gibraltar.   

However, further obstacles may lie ahead in the form of the Junta de Andalucia, which has complained loudly about Gibraltar’s ‘tax haven’ status.

Junta president Juanma Moreno said: “We cannot permit a tax haven on Andalucian territory because it degrades and paralyses the economic activity of an area where 300,000 Andalucian citizens live.

“The problem Gibraltar has is that it has a special tax regime. This has created an astronomical nine-fold income inequality between a neighbour in La Linea and one in Gibraltar.

“And while this regime exists, it is technically impossible for the Campo de Gibraltar to catch up.

“The Campo needs its own special tax status that balances out the tax regimes between the two jurisdictions.

READ MORE: Spain and the UK agree ‘general political lines’ on post-Brexit deal over Gibraltar

Junta President Juanma Moreno has called for an end to Gibraltar’s ‘tax haven status’

He also called for more investment for the Campo from the Spanish government and the European Union in order to allow it to compete with Gibraltar.

But more ominously, he said that the Junta only has one fundamental objective: “To recover sovereignty of Gibraltar.”

However, speaking to Spanish media, Albares said there was no ‘insurmountable obstacle’ to sealing a deal.

He added: “There is still work to be done in everything regarding the guarantees that we want for the application of Schengen controls, of the customs area, and also in everything related to the harmonisation of indirect taxes .”

Walter Finch

Walter - or Walt to most people - is a former and sometimes still photographer and filmmaker who likes to dig under the surface.
A NCTJ-trained journalist, he came to the Costa del Sol - Gibraltar hotspot from the Daily Mail in 2022 to report on organised crime, corruption, financial fraud and a little bit of whatever is going on.
Got a story? [email protected]

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