Author: Michael Stothard
Posted on: Financial Times |February 25th, 2018
Spain is demanding joint management of Gibraltar’s airport after Britain leaves the EU, as it spells out its position on an issue that could derail a Brexit deal. Alfonso Dastis, Spain’s foreign minister, told the Financial Times that Spain wants a bilateral deal with the UK that includes “managing the airport together” as well greater co-operation on tax fraud and tobacco smuggling.
His position falls well short of a full-blooded demand for sovereignty over Gibraltar as part of a Brexit deal. “Sovereignty is something we aspire to, that we are not renouncing, but in these negotiations it is not the issue,” Mr Dastis said. But the Spanish proposal is likely to be highly contentious for London, which has long maintained that the airport is a British asset on British land. Previous talks about enlarging the airport so it is also on Spanish land have fallen through.
The Brexit talks between the UK and the EU have given new urgency to the dispute over Gibraltar, ceded to Britain under the 1713 Treaty of Utrecht. Last year the Spanish government won a formal veto over the provisions of any future EU-UK deal that would apply to the territory.
Since Britain insists that Gibraltar must leave the bloc on the same terms as the UK, the use of such a veto could derail a broader Brexit deal.
The issue of the airport is even more fraught, since it is located on the isthmus that connects the rock of Gibraltar with the Spanish mainland — land that Madrid considers illegally occupied by the UK. Mr Dastis said that Spain “has a claim” to the land.
He said a deal on Gibraltar would not have to be completely resolved by crucial summit next month, in which Britain hopes to agree the broad terms of a transition period, but would have to be struck before the final withdrawal agreement is closed later in the year. The two governments have repeatedly failed over the past 40 years to reach a lasting deal on the airport.
Speaking from his foreign ministry office, Mr Dastis said he was “cautiously optimistic” on Spain’s bilateral talks with the UK about Gibraltar and that “irritants” could be addressed. He is seen as one of the more dovish members of the Spanish government on Gibraltar and added that the country’s main focus was to make travel between Gibraltar and Spain as easy as possible. He floated suggestions to “improve” the ease of travel, such as a common border control operated by Spain and Gibraltar or pre-registering frequent travellers.
Around 8,000 Spaniards from the nearby Campo de Gibraltar — which has one of the highest unemployment rates in Spain — cross the border every day to work.
There are also about 5,000 British and other EU nationals who do the same. In a conciliatory remark on an issue that has long rankled the Gibraltar government, Mr Dastis added he could accept the inclusion of Gibraltarians in the British delegation in the bilateral talks.
He said Gibraltar appeared to be willing to address complaints over tobacco smuggling and its approach towards tax and fiscal transparency, which Spain says enables profit-shifting and tax evasion, despite Gibraltarian denials.
“We need some more co-operation with the Gibraltar or the UK tax authorities, but the situation has already improved,” he said. “The Gibraltarians seem willing to co-operate; we need to see that in practice.” Gibraltar’s corporate tax is 10 per cent, while in Spain companies pay 25 per cent.
Mr Dastis also struck a dovish tone on the wider Brexit negotiations, calling for a future EU-UK relationship to be as “close as possible” to the status quo. But he added that this would be tough if the UK stuck to red lines such as wanting an independent trade policy.