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Menumenu
Menumenu

Spain and Gibraltar

Spain carries hope and Gibraltar descends into chaos. The Proposed referendum on United Kingdom membership in the European Union changed the political and diplomatic situation between Spain and the British Overseas Territory of Gibraltar. For decades, the Spaniards claim the Territory with a land area of 6.5 km². However, on the referendum of the 7th of November 2002, the citizens of Gibraltar voted clearly for staying under the British rule, giving 99% of their votes. Only 187 residents were then in favour of a shared sovereignty. The turnout at that referendum was 90%.

Just one day after the Brexit the Spanish Foreign Minister García-Margallo reminded to the Gibraltar´s Governor the proposal of “a British – Spanish co-sovereignty” for the island. The proposed status would be declared for a limited period, which should then lead to the return of the actual British territory onto Spain. The answer on the referendum in 2002 was a clear majority to reject this proposal, but two days after the referendum on United Kingdom membership in the European Union, Gibraltar and Scotland initiated discussions about how to stay independently remain in the EU. The rush of Gibraltar to find solutions is understandable. The economic and political dependence of Gibraltar dictated primarily by its location away from the British territory and in close proximity to Spain, created a great pressure from the moment of receiving results of the referendum, which was held on Thursday 23 June.

Spain and Gibraltar Economy.

Especially the financial sector of Gibraltar with the off-shore status, the tourism sector and the management of casinos and online betting Companies demand clear information whether the consequences of leaving or staying in the EU. The state budget of Gibraltar was generating since 2004 regular budget surpluses between 1.1% and 4.1% of GDP. In financial year 2011/2012, the gross domestic product amounted to 1.17 billion pounds, which corresponded to the middle of 2012 about 1.8 billion US dollars. Whether these figures are to achieve in the future remains questionable, because meanwhile, a large outflow of capital in the United States is to determine, but cannot be precisely quantified. A solution for the gaming industry is necessary right now because there are already exist plans to relocate the business seats to Curacao.

Currency

The Gibraltar currency situation is another delicate point in the new reality. Although the Gibraltar pound is a currency of its own, but 1: 1 linked to the British pound. To avoid all those possible problems the citizens of Gibraltar had voted almost 96% for remaining in the EU and became the region with the most yes votes for staying in the European Union. It is unknown whether Spain is going to force the issue practically closing the border with Gibraltar, as they did in 2012 due to growing tensions between Gibraltar (backed by Britain) and Spain, when the Spanish border control began to search every passing vehicle, creating queues on both sides of the border which were between 6 and 8 hours long.