The historic dispute over Gibraltar's sovereignty is set aside. No one was willing to give in on this. Their respective nationalist positions remain intact, both in Madrid and London. But the path of pragmatic negotiation has prevailed. Although five years have passed since Brexit—in fact, it was the last Brexit detail left to be finalized—an understanding has finally been reached. The most visible result is that, from now on, social and economic life on the Rock will return to a degree of normality.
The agreement signed in Brussels, which all parties—Spain, the United Kingdom, and the European Union—have described as "historic," entails the permanent opening of the land fence, a relief for the entire region. Undoubtedly, life will be made easier for the 15,000 workers who enter the Rock daily. And goods circulating between Spain and Gibraltar will no longer have to undergo any inspection. However, at ports and airports—the EU's external border—controls will remain in place, carried out by both Spanish and Gibraltarian police, so people wishing to enter the Rock will have to pass through two.
As European Commission President Ursula von der Leyen said, "This agreement safeguards the integrity of the Schengen area and the single market, while ensuring stability, legal certainty, and prosperity for the region." At a time of European turmoil, when the Schengen area is in turmoil on more than one continental latitude, it's good news that some sanity has been restored in Gibraltar. If anyone stands to gain, it's Europe.
Brussels has also contributed to the agreement by removing Gibraltar from the list of tax havens, which will mean that European financial institutions will not have to apply additional controls to transactions and transfers made by entities established on the Rock. However, in financial terms, the agreement obliges Gibraltar to provide Spain with all tax information on its activities in the area, and all companies based on the Rock, and with a majority of Spanish capital or shareholders, must pay taxes in Madrid.
The governments of Socialist Pedro Sánchez and Labour's Keir Starmer have demonstrated their ideological harmony. And economic harmony: the United Kingdom was the main investor in the state last year (€12 billion), a business volume that has a Spanish counterpart on the islands in the numerous companies involved in the British productive fabric, such as Indra, Acciona, Navantia, and Dragados, among others. Spain, moreover, aspires to greater involvement in the United Kingdom's defense industry at a time when rearmament of the continent is emerging as a priority.
In any case, the British Prime Minister's pro-European shift has also helped in this final stretch. Nor did it make sense, for either Starmer or Sánchez, to prolong a Gibraltar blockade that only fueled the symbolic imagery of the far right in their respective countries. That's why the sovereignty dispute has been put on the back burner, and the European focus has gradually become more pressing.
