Spain’s Foreign Minister talks of ‘shared prosperity’ and ‘a 21st century version of sovereignty’

By Chronicle staff and agencies

Spain wants “an area of shared prosperity” with Gibraltar and a “21st century version of sovereignty”, the country’s Minister for Foreign Affairs, Arancha Gonzalez Laya, said in an interview with El Pais on Sunday.
Mrs Gonzalez Laya, who has held senior roles in organisations including the United Nations and the International Trade Centre, did not expand on what she meant with the ‘21st century’ phrase, but added that sovereignty was not a good starting point for any negotiation.
She made the comments during a wide-ranging interview in which she was asked whether Spain was planning to pursue co-sovereignty as part of its strategy in the next phase of Brexit talks.
“I know few negotiations that start by talking about sovereignty,” Mrs Gonzalez Laya told the newspaper.
“In my 25 years negotiating, I’ve never seen any.”
“We’ve started with an issue that is very important for sovereignty, [and that is] the absence of unfair tax competition.”
“We’re looking for a 21st century version of sovereignty. Let’s see where we get to.”
The interview came just days after the EU published negotiating guidelines that seek to exclude Gibraltar from any deal and give Spain the deciding voice in any parallel agreement extended to the Rock.
When the EU guidelines were published, Prime Minister Boris Johnson replied by insisting the UK would negotiate “on behalf of the entire UK family including Gibraltar”.
Both Gibraltar and the UK have stated they want good cross-border relations with the Campo.
But Mr Johnson made clear last week that the Rock’s British sovereignty remained “indivisible”, a sentiment echoed here by Chief Minister Fabian Picardo too.
In the interview on Sunday, Mrs Gonzalez Laya was also asked about the Spanish veto over Gibraltar’s inclusion in any agreement between the UK and the European Union.
“The Withdrawal Agreement clarified that right to a veto and a new system of governance in respect of Gibraltar is already being built,” she said.
“The tax treaty, the first on Gibraltar since [the treaty of] Utrecht, prevents unfair competition.”
“We want an area of prosperity between the Rock and the Campo de Gibraltar.”
She added that Gibraltar’s future relations with the EU were “a matter between the United Kingdom and Spain” but that a working group would be established “as a precautionary measure” to deal with any issues that had implications for other member states.

ISOLA IN LONDON

In a separate development, Financial Services Minister Albert Isola told Reuters yesterday that a logjam at the border would be far more of a blow to Gibraltar’s economy than the loss of access to the EU single market.
Mr Isola said that just 8% of Gibraltar's £2.35 billion financial sector is business with the EU, with the rest derived from Britain where, for example, one in four motorists are covered by insurers based on the Rock.
"We are 32,000 people, and just with the UK there is more than enough business," Mr Isola told Reuters.
While financial firms in the City of London have spent millions of pounds on EU hubs and relocating thousands of staff, Brexit fallout on Gibraltar has been far less dramatic so far.
Agreement with Britain for continued unfettered access to the UK market has eased concerns, along with no "significant exit" of financial firms or jobs, Mr Isola said.
"That gives us an opportunity to carry on as we are and potentially grow," he said, referring to a growing focus on new areas like blockchain.
This contrasts with 15 online gaming firms in Gibraltar, which account for 75% to 80% of Britain's online gaming market, who have had to open hubs in Malta and other EU sates to avoid disruption to clients in the bloc.
After a post-Brexit transition period ends in December, Britain may get some direct access to EU financial markets under the bloc's "equivalence" system.
But it is unclear if Gibraltar would benefit given that Spain could veto its access to the bloc.
"We need to see how this pans out. We are fully aware that any UK-EU deal will have a Spanish input in so far as it affects Gibraltar and we have to see how that goes," Mr Isola said.
Gibraltar's prospects for direct access to the EU are "not high" and it was far more critical to maintain "fluidity at the frontier" for a financial sector that accounts for a fifth of economic output.
About 15,000 people commute daily from Spain to work in Gibraltar and they are already subject to checks.
Mr Isola said much hinges on whether Spain resorts to what one former Spanish minister called "punitive politics" that would create border bottlenecks.
"In January 2021 there should be zero change at the border. Unless we have 'punitive politics', we will be absolutely fine, but that is a risk," Mr Isola said.