Spain and Gibraltar are seeking a last-minute Brexit deal to strengthen ties and preserve free movement across their border as they try to avoid reigniting the centuries-old dispute over the territory’s sovereignty.

Arancha González, Spain’s foreign minister, and Fabian Picardo, Gibraltar chief minister, separately told the Financial Times the two sides could reach a “practical” deal that would limit disruption for thousands of cross-border workers between Spain and the territory when the UK leaves the EU’s single market on December 31. 

Both added that such a deal would not address the sovereignty dispute that has continued since Gibraltar, close to Spain’s southernmost tip, was ceded to Britain in the 1713 Treaty of Utrecht.

The talks are particularly sensitive, not just because they affect the economic prospects of both Gibraltar and much of southern Spain, but because the British overseas territory is in effect seeking closer ties with the EU than when it was part of the bloc.

While Boris Johnson’s government wants a Canada-style free trade Brexit deal for the UK itself, Gibraltar would like to become part of Europe’s Schengen free-movement area and eventually the EU’s customs union — to neither of which it has ever belonged.

The issue is becoming increasingly urgent, with negotiators attempting to thrash out an overall Brexit deal by mid-November and the parallel three-way talks between Spain, Gibraltar and the UK aiming to conclude immediately afterwards.

Mr Picardo said: “It is becoming a tighter and tighter timetable and we need to step up a gear . . . We are ready to deliver a deal so long as it is sovereignty neutral and positive for all sides.”

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Ms González warned “political will” was necessary to close the deal, which involves a territory that has inflamed passions on all sides.

In 2017, Michael Howard, a former Conservative party leader, suggested Britain could go to war to resist Spanish efforts to increase its influence over Gibraltar. Spanish prime minister Pedro Sánchez threatened to torpedo Theresa May’s newly minted Brexit deal with the EU over the issue in November 2018.

Fabian Picardo: ‘We are ready to deliver a deal so long as it is sovereignty neutral and positive for all sides’ © Matt Cardy/Getty Images

UK officials remain nervous about signing an agreement that could be depicted as watering down sovereignty or reducing British influence over the territory.

Ms González said: “On the big sovereignty issue, we know where things stand — we will not renounce sovereignty, nor will the UK — but, below that, on the things that matter for everyday life, we know that we can make it smoother, we can make it simpler, we can make it less costly [than a no-deal scenario].”

About 15,000 people cross the Spanish border to work in Gibraltar every day, taking up about half the jobs in the territory. Most of the cross-border workers are Spaniards who have relatively few prospects of finding alternative work in the frontier town of La Linea, where unemployment is close to 40 per cent.

Locator map showing Gibraltar and Spain

The EU negotiating mandate makes it clear that Gibraltar will not be covered by an EU-UK future-relationship agreement. This places the onus on Madrid and London to come up with a deal, with the EU firmly in Madrid’s corner. 

“On the Spanish side, we will leave no stone unturned to get to a deal,” Ms González said. “If we don’t do this . . . the border of Europe [will be] Gibraltar, with all the consequences that this has, but if we invest in a deal, we can create this space of shared prosperity that we have been talking about for a while.”

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Mr Picardo has argued for months that under a Schengen-style arrangement many more Spaniards could find work in Gibraltar and in the broader region.

Negotiating enhanced free movement for a British overseas territory is highly sensitive for the UK government, which champions a much harder Brexit deal for Britain itself.

But British officials have indicated that they would not stand in the way of a mutually beneficial deal between Spain and Gibraltar — despite their concerns about how such an agreement could be perceived.

“We remain committed to finding a solution that supports Gibraltar, its people, and its economy,” the UK government said. “The UK and government of Gibraltar continue technical talks with Spain to deliver the shared priority of continued wellbeing and prosperity of people in the region.”

Mr Picardo said: “There are many issues to resolve but the goodwill is there to make a deal possible . . . People want solutions from us, not rhetoric.”

Via Financial Times