Gibraltar Joins Schengen Area

By Christopher Pitaluga, Abacus Financial Services Ltd

It’s funny how once-in-a-generation opportunities tend to come, well, once in a generation. In the case of Gibraltar’s recent agreement with Spain and the UK to formalise a treaty by 30 June 2021 that will see Gibraltar join the Schengen area and achieve customs alignment with the EU, it’s a once-in-two-generations event.

I know what I’m talking about. I was born in 1961, and a year later my father accompanied our Chief Minister to the United Nations to defend Gibraltar against a gradual blockade by Spain that was territorial, economic, political, and social. It would lead to the full closure of the frontier with Spain in 1969. Spain reopened it in 1982, as a precondition for joining the EEC but, ever since, Spain has maintained its strategy of making life diffcult for Gibraltarians and, in particular, within the EU.

Apparently, no longer. Last New Year’s Eve, Gibraltar, the UK, and Spain achieved a historic accord that, in principle, will allow for the elimination of the physical border between Spain and Gibraltar, with the latter becoming part of the Schengen area, allowing free movement of people between Spain and the Rock in a manner not seen since Europe was basking in the afterglow of the Marshall plan at the end of World War II.

The agreement also states that the parties will work towards a definitive treaty between the EU and the UK, which could include alignment on customs.

The implications of all this are numerous and huge.

For locals, it will mean no more queues to get into and out of Gibraltar. If you think that’s hardly consequential, try sitting for two hours in a queue of cars on a hot afternoon with three kids in the back for company, just to get home from doing your shopping. Then do that every weekend and once or twice during the week as well.

Less mundanely, it should usher in a new era of getting along better with the neighbours: again, not to be dismissed lightly in the context of a life lived well. Robert Frost has a character in his poem Mending Wall say that “good fences make good neighbours”, which makes a kind of sense until you realise that actually the fence just makes for a good standoff and there is not much that’s neighbourly about that.

Taking it up a level, it means that, at last, flights from anywhere in the EU should be able to come into a Gibraltar airport. Hitherto, Spain prevented flights from the EU landing at Gibraltar by lobbying hard to get the Rock excluded from all EU “single skies” directives.

The treaty should result in mercantile expansion across the region. Indeed, it has been the Spanish government that has described the purpose of the treaty as being to establish an “area of shared economic prosperity”. After decades of describing Gibraltarians as pirates (not kidding), tax-evaders, smugglers, and a generally disappointing lot, the language has also come full circle. It seems to have finally clicked that, in the third decade of the twentyfirst century, politics should be about doing all things possible for the citizenry to make the most of the opportunities available to it.

Finally, and most importantly, the treaty, which, if achieved, will be a remarkable consequence, implying as it does a permanent resolution to “the Gibraltar problem”, should allow Gibraltar to attract business right across all its established areas of expertise: gaming, funds, wealth management, banking, corporate administration, and trusteeship. Fantastic.

I hear you thinking that there’s no such thing as a free lunch. Where’s the catch?

A very good question. I think the worst of it is that we are going to have to get used to seeing EU offcials at our “new” Schengen borders at the airport and the ports.

The other big plus for Spain is that by dispensing with what they have always called “la verja” – the fence – its removal results in a kind of territorial amalgamation of where Gibraltar ends, and Spain begins. How have they not twigged before that the symbolism of aking away the fence means visually advancing, however minutely, their 300-year claim that Gibraltar and Spain are a single territorial unity?

Whether Spain succeeds or not in persuading my grandchildren that their future lies with them, at least they have taken the first big, big step in the right direction to make those of us of earlier generations, wounded by battering, think that they might at last be worthy of our trust. In Frost’s poem it’s a wall, not a fence, that separates. Turns out that it’s not fences or walls that make good neighbours. “Something there is that doesn’t like a wall” says our man. What have we each been trying to keep in? What have we each been trying to keep out? As we embark on this journey, the most exciting thing is that we’re about to find out what we’ve all been missing.

Christopher Pitaluga

Christopher Pitaluga

GGI member firm
Abacus Financial Services Ltd
Auditing and Accounting, Fiduciary and Estate Planning, Tax
T: +350 200 78777
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Published: GGI Insider, No. 112, March 2021 l Photo: Patrik -

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