At a press conference in Madrid on Monday, Spanish foreign minister Alfonso Dastis said he was taken aback by British attitudes to events.
“The Spanish government is a little surprised by the tone of comments coming out of Britain, a country known for its composure. It seems someone is losing their cool,” he said.
Spanish veto
The comments were in response to former Conservative leader Michael Howard who told British media on Sunday that the UK would go to war with Spain to defend Gibraltar after draft Brexit guidelines published by the EU last Friday suggested that Spain could be given the final say over the future of the British overseas territory.
In response, Gibraltar’s chief minister Fabian Picardo said: “Gibraltar is not a bargaining chip in these negotiations.
“Gibraltar belongs to the Gibraltarians and we want to stay British.”
‘Cuckholded husband’
Picardo accused the EU of behaving like a “cuckolded husband who is taking it out on the children” as tensions between London and Madrid escalated.
According to the BBC, British prime minister Theresa May has laughed off journalists’ questions about going to war with Spain following the Gibraltar Brexit row, adding her approach to negotiations was “definitely jaw jaw” rather than “war war”.
Speaking ahead of EU foreign ministers’ meeting in Luxembourg on Monday, UK foreign secretary Boris Johnson said there will be no change to Gibraltar’s sovereignty without Britain’s consent.
“The sovereignty of Gibraltar is unchanged and is not going to change, and cannot conceivably change without the express support and consent of the people of Gibraltar and the United Kingdom, and that is not going to change,” he said.
Qrops changes
The row comes at a critical time for Gibraltar, which announced last week it will not drop its rule that 30% of a Qrops fund can be taken tax free despite a widespread industry view that HM Revenue & Customs (HMRC) requires full flexible access for all qualifying schemes.
The jurisdiction’s new pension regulations followed “discussions with the UK authorities” in which it was decided not to introduce flexible access for Gibraltar Qrops in a move which could be seen as giving the British overseas territory a competitive edge in the international pensions market.
Brexit
Gibraltar is also keen to shore up its status as a financial centre, traditionally used by the UK’s financial services sector to passport into the rest of the EU, after publishing a report in January which stated that nearly half of all jobs on the British overseas territory would be lost if a hard Brexit deal is struck.
Despite being one of the world’s smallest jurisdictions, it is also one of the wealthiest, with gross domestic product reaching £1.64bn ($2bn, €1.9bn) in 2015.
With a population of 33,140, this places Gibraltar fourth in the world for GDP per capita, ahead of Singapore and Hong Kong.
However, “The Rock” has said it is “well prepared” to deal with “every eventuality” of the Brexit processing, with officials from Gibraltar Finance previously revealing to International Adviser that its financial service sector is “very significantly UK facing”.
