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20 Mar 2017
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Gibraltar thinks of its post-Brexit future

Gibraltar, a relatively unknown United Kingdom outpost on the Iberian Peninsula, just opposite of Morocco, is trying to find answers in the question “how will Gibraltar face the Brexit consequences?”. The Rock, as it is called for hundreds of years by sailormen, voted against Brexit with an unquestionable 96% of the total votes.

People in Great Britain, 1450 miles far away, didn’t share the same opinion and Brexit became a new reality. Now, 32,000 permanent residents and 12,000 workers, that each day pass the borders to earn a living, are facing an unsettling situation. During the campaign for the UK referendum, Spain had warned that, in case the UK voted to leave the EU, it would push to claim control over Gibraltar, which is under British control for three centuries.  Fabian Picardo, the Chief Minister of Gibraltar, warned the David Cameron government that Brexit would pose a threat to Gibraltar’s safety.

Nevertheless, Brexiteers won the referendum, leaving the residents of the Rock in great uncertainty. Christian Hernandez, Gibraltar’s Chamber of Commerce President said to BBC that “we have taken a pragmatic view that we just have to accept the new political reality of Brexit and we are concentrating our efforts on trying to ensure that the UK government will negotiate a good deal for Gibraltar.” The strong business community and the local government had campaigned strongly to Remain but the new reality has made them seek alternative options in dealing with it.

Fabian Picardo opposes any hard Brexit with no deal with the European Union. He said in an interview: “I think a hard Brexit will be very challenging to the economic model that is the source of our prosperity for 30 years. We’ll be looking for a relationship with the EU that may differ from the UK’s, perhaps an associate style like Andorra’s and Lichtenstein’s. We’d like an agreement to give us access to the single market and freedom of movement.”

Gibraltar’s main income comes from UK companies that have it as a base for operations due to low tax and online gambling operators. The Rock has a 10% corporate tax rate and ready access to regulators, attracting more than 500 financial services firms to set up their businesses on its soil. Gibraltar’s economic growth has reached double digits, even in times of financial crisis.

The prime minister of Spain, Mariano Rajoy, according to Politico.eu, said to May that once the UK abandons free movement and the single market, Gibraltar should do so too-unless it agrees to joint rule. The Rock finds itself again between two of Europe’s greatest powers, as it has happened many times in the past. However, there are some Gibraltar residents that are more optimistic than others. One of them is Edward Macquisten of the Gibraltar Chamber of Commerce that told the Guardian: “Things are going to get tough, but this is a small, agile jurisdiction. The people here are used to uncertainty. If one market closes, we’ll find others.”

Businesses on the Rock are exploring all alternatives to make the best of the new situation. Online gaming businesses are not expected to face problems because, in fact, they never benefited from the single market because of the EU’s strict rules. Ordinary citizens believe that since they showed their undeniable support voting for Bremain, EU officials are not going to “punish” them. They think that Gibraltar is a model of what the EU set out to achieve, from the beginning.

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