The Northern Ireland border is a difficult theme. But the real hurdle to a Brexit deal may well come from Gibraltar.
We don't have the best relationship with Spain, and there’s no way it would agree to let Gibraltar leave the SM and keep its benefits.
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> Gibraltar has a population of 32 thousand, and a GDP of approx £1.6bn. As a British Overseas Territory it's part of the single market. But it's NOT part of Schengen or the EU customs union. It has a corporate tax rate of just 10%.
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> Two of Gibraltar's main industries are financial services and online gambling. They're largely successful due to low taxation and membership of the SM. Gibraltar also has the 2nd highest ratio of accounting firms to people in the world, and the fifth highest ratio of banks
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> Gibraltar’s wealth is severely threatened if it loses its EU financial passporting rights. Its online gambling industry would also no longer be able to sell its services across the EU if we left the single market.
But that isn't the only way Gibraltar would be affected
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> 10,000 people cross the border into Gibraltar every day to work. It is not in Schengen or the EU customs union, so there are currently controls at the border. However, these would dramatically increase if the UK leaves the EU and single market to become a third nation
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> If UK leaves the EU and SM, Spain will be able to virtually close down Gibraltar through border controls. Spain has also insisted that any future EU/UK aviation deal will NOT include Gibraltar.
By ending FOM, all its 10,000 EU workers would need work permits from the UK.
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> Increased border controls would also affect tourism on Gibraltar. Visitors wanting to visit there from Spain would face lengthy border controls, whilst visitors arriving by cruise ship in Gibraltar would suffer the same controls if they chose to ever leave the rock.
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> The final problem with Gibraltar’s role in Brexit is the UK’s relationship with Spain. Spain is not Ireland, and our relationship is not close. Spain wants Gibraltar back, and Brexit gives Spain all the leverage it needs to get what it wants.
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> A Brexit deal needs the approval of all 27 members of the EU. And a scenario can now be envisaged where Spain leaves its demands about Gibraltar to simmer for a few months, until all the other problems associated with Brexit have been apparently solved.
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> The UK has put itself into a uniquely weak position with Gibraltar. And the EU knows what’s coming! That’s why it stated in its A50 guidelines that any agreement on Gibraltar is a purely bilateral matter between the UK and Spain alone.
The EU wants nothing to do with it!
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> So what will happen when Spain makes its last minute demands on Gibraltar, probably some time around September?
The way I see it, the UK has 4 choices (though the 4th is only for diehard Brexiters!):
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1》Hand Gibraltar back to Spain in order to get a Brexit deal.
2》Refuse to accept Spain’s demands, and crash out of the EU without a deal.
3》Cancel Brexit and remain in the EU or single market, accepting FOM.
4》Use the stand off as an excuse to go to war with Spain!
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