THE Junta de Andalucia is attempting to ride in to the rescue for border town La Linea as it faces calamity over the potential failure of treaty negotiations with Gibraltar.
Junta President Juanma Moreno met with La Línea Mayor Juan Franco to pledge support amid growing concern over the post-Brexit landscape.
The town’s dependance on Gibraltar for employment, with one in every three workers earning their living on the Rock, means that any changes to the border fluidity due to treaty talk breakdowns could drastically affect the town’s economy.
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The Junta is considering various financial ‘alternatives’, including pumping greater funds into the impoverished town through increased regional tax revenue sharing to imposing a special fiscal regime akin to the Canary Islands.
These measures would be intended to address concerns of unfair competition, as Gibraltar’s 15% corporate tax rate contrasts sharply with Spain’s 25%.
The Canary Islands offers a very low corporate tax rate of 4%, although to benefit from it companies must meet certain requirements, such as creating jobs and making investments in the islands.
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Meanwhile, in 2024 La Linea received only €3,284,885.85 in direct investment from the Junta, something which could be bumped up significantly.
The lack of a finalised EU-UK treaty on Gibraltar creates significant uncertainty for Brits, Gibraltarians and Spanish alike.
Spanish Finance Minister María Jesús Montero has previously tied any special fiscal status for La Línea to the successful completion of a UK-Gibraltar agreement, implying the town is on its own if the talks fail.
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