Diplomatic relations between Spain and the UK date back more than 500 years, but they have been blighted since Gibraltar was ceded to Britain at the Treaty of Utrecht in 1713.<\/p>\n
British diplomats had expressed frustration that bilateral issues had been stymied by the lack of a deal over the future of Gibraltar. Now channels should be more fluid in an important relationship.<\/p>\n
![\"David](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/\/6ce04b56-01b5-480c-a4dd-c470c3a01c93.jpg\")
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David Lammy, the foreign secretary, with Fabian Picardo, Gibraltar\u2019s chief minister<\/p>\n
BEN DANCE \/ FCDO<\/p>\n
There are more flights between Spain and the UK than between any other two countries in the world. Trade between the two countries reached \u20ac65 billion last year. The UK is the third-largest investor in Spain and the second-largest recipient of Spanish investment. There are about 400 Spanish companies registered in the UK, and about 700 British companies investing in Spain.<\/p>\n
The Gibraltar deal, however, will undoubtedly be closely scrutinised by eurosceptics in Reform and the Conservative Party, who have so far criticised Sir Keir Starmer\u2019s EU reset deal<\/a>.<\/p>\n How does it affect sovereignty?<\/p>\n The governments of Gibraltar and Britain have been at pains to stress that the deal will not affect the sovereignty of the UK territory. The Westminster government\u2019s statement after the deal was announced was titled: \u201cAgreement protects sovereignty and economic security of Gibraltar.\u201d <\/p>\n It went on to state that the agreement was designed to \u201cprotect British sovereignty, UK military autonomy and secure Gibraltar\u2019s economic future\u201d. Fabian Picardo, Gibraltar\u2019s chief minister, echoed this, saying that the deal \u201cdoes not in any way affect our British sovereignty\u201d. <\/p>\n However, throughout the negotiations Spanish diplomats had been chipping away. Jos\u00e9 Manuel Albares, Spain\u2019s foreign minister, insisted in 2023 that Madrid\u2019s proposed control of Gibraltar\u2019s airport, which is on an RAF base, was essential to an agreement<\/a>. He tied the proposal to the possibility of the airport being used in future by flights from Spain and the EU. <\/p>\n Spanish diplomats spoke of the British \u201cquibbling\u201d over the demand, describing London\u2019s attitude as \u201cpenny wise and pound foolish\u201d. One said that Madrid\u2019s aims were to \u201crejig the sovereignty balance slightly in Spain\u2019s favour\u201d. He added, with what some in Whitehall called \u201csophistry\u201d, that such a rejig \u201cweakens Spain\u2019s negotiating position in the long term as a treaty would implicitly recognise UK sovereignty\u201d.<\/p>\n Vice-Admiral Sir David Steel, the then governor of Gibraltar, told The Times at the time<\/a>: \u201cWe must ensure that it doesn\u2019t stretch into sovereignty \u2026 that it does not exceed what we can accept in terms of jurisdiction and control.\u201d<\/p>\n So is this a concession to Spain? <\/p>\n Picardo has cast himself as a redoubtable defender of Gibraltar\u2019s sovereignty. As a barrister who runs rings round MPs when holding meetings with them he is not expected to have agreed to a deal that would create a legal chink in the armour. However, the deal will be open to rival interpretations. <\/p>\n The British government and Gibraltar had strongly objected to the presence of Spanish police on UK territory. But in a victory for Madrid, Spanish police will indeed be deployed at the airport in exchange for an open land border between Gibraltar and Spain \u2014 effectively making the territory part of the EU\u2019s Schengen free-travel zone. That may open a legal door to Spanish designs on Gibraltar in the decades or years to come. <\/p>\n Many Gibraltarians have voiced fears about the consequences of Spanish police operating on their territory. Will the deployment prompt concerns about the weakening of the guarantees of the British justice system? Yes, most likely. <\/p>\n How will it affect Gibraltar<\/b>\u2019s economy<\/b>?<\/p>\n Critically, the deal will allow for the free movement of people across the border between Gibraltar and Spain. Freedom of movement is essential to the territory, which has a population of 30,000, as it is dependent on about 15,000 workers crossing the border every day from Spain.<\/p>\n Francisco Franco began restricting the border in the 1950s but it was in 1969, two years after 99 per cent of Gibraltarians voted against a Spanish attempt to assume sovereignty, he slammed it shut, dividing families and destroying livelihoods. The hardship that followed has been burnished in the Gibraltarian identity. The border did not fully reopen until 1985, a decade after Franco\u2019s death, when Spain joined the EU. But since then Spain has continued to choke border traffic when political tensions increase with the UK over the territory<\/a>. <\/p>\n JORGE GUERRERO\/AFP VIA GETTY IMAGES<\/p>\n A lack of a deal would have been catastrophic for Gibraltar\u2019s coffers. In an area of less than 7 sq km, there are more than 14,000 registered companies. Gibraltar is home to most of the UK\u2019s biggest gambling companies, a thriving car insurance sector and the business of importing alcohol and tobacco. Without the extra labour from Spain, its economy would be upended. <\/p>\n Instead Gibraltar will in effect become part of the Schengen area, allowing freedom of movement for workers with entry checks only carried out at its port and airport. Gibraltar will become closer to the EU\u2019s customs union \u2014 which it was not in before Brexit \u2014 opening up new commercial opportunities. <\/p>\n![\"Vehicles](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/\/94bce4b7-e396-4eed-bbbc-4c2a4f56c6a2.jpg\")
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