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GIBRALTAR

Spain and UK agree 11th-hour border deal for Gibraltar

Gibraltar will become part of Europe's passport-free zone to keep movement fluid on its border with Spain in a landmark deal reached just hours before Britain leaves the EU custom's union and single market, Spain's top diplomat said Thursday, December 31.

Spain and UK agree 11th-hour border deal for Gibraltar
Image: JORGE GUERRERO / AFP

Negotiators representing the governments in Madrid, London and Gibraltar have been working around the clock to ink a deal to avoid the creation of a new “hard border” between the tiny British territory and the European Union that would have caused huge disruption for travellers and businesses on both sides of the line.

“We have reached an initial agreement with the United Kingdom which will serve as the foundation for a future treaty between the European Union and the United Kingdom concerning Gibraltar,” Foreign Minister Arancha Gonzalez Laya told reporters in Madrid.

In a separate address, Gibraltar's Chief Minister Fabian Picardo said the deal set the stage for a treaty that would allow for “maximised and unrestricted mobility” of people and goods across the border.

“We're going to avert the worst effects of a hard Brexit,” he said of the deal which was finalised in “the early hours of this morning” describing it as “a proposed framework for a UK-European Union agreement or treaty on Gibraltar's future relationship with the EU”.

The deal was announced a week after Britain reached its own last-minute post-Brexit trade agreement with the EU although it did not cover Gibraltar, a tiny British territory on Spain's southern tip which is historically claimed by Madrid.

The agreement was hailed on Twitter by the Spanish and British prime ministers, with Spain's Pedro Sanchez saying it marked the start of “a new era” that would allow for “the removal of barriers”, while Britain's Boris Johnson “wholeheartedly” welcomed the deal, stressing the UK's commitment to “the protection of the interests of Gibraltar and its British sovereignty.”

Schengen at the border

Under terms of the agreement, Gibraltar would become a part of the Schengen zone with Spain acting as guarantor, Gonzalez Laya said. Schengen covers most of the 27 EU members, along with Norway, Iceland, Switzerland and Lichtenstein.

“With this (agreement), the fence is removed, Schengen is applied to Gibraltar… it allows for the lifting of controls between Gibraltar and Spain,” she said.

“Until the agreement comes into force, we will use the arrangements permitted under Schengen to relax controls at the border,” she said, indicating the UK and the EU were expected to sign the deal “within an estimated six months”.

Picardo said Spain would be responsible for managing the Schengen arrangement which would be implemented by Frontex, the agency charged with protecting the EU's external borders. “This will be managed by the introduction of a Frontex operation for the control of entry and exit points,” he said. The arrangement will be in place for an initial four-year period.

A desire to keep things flowing smoothly at the border explains why in 2016 nearly 96 percent of voters in Gibraltar backed staying in the EU, while in Britain proper the referendum vote was 52-48 percent in favour of leaving the bloc.

With a land area of just 6.8-square kilometres (2.6-square miles), Gibraltar is entirely dependent on imports to supply its 34,000 residents, a no-deal scenario would have slowed the cross-border movement of goods with new customs procedures.

Border fluidity is also key for some 15,000 people who cross into Gibraltar every day to work, accounting for half of the territory's workforce. Most are Spanish and live in the impoverished neighbouring area of La Linea.

'Good news' for workers

At the border, few workers had heard about the agreement but expressed relief a deal had been reached.

Ada Vazquez, a 32-year-old single mother who has been crossing the border to work for the past 14 years, told AFP it was “good news”. “This agreement is a relief for us,” said Vazquez who works in a chocolate shop. “I was afraid there would be long queues.”

Gibraltar also welcomes around 10 million visitors per year, mainly day-trippers who cross from Spain, drawn in part by the duty-free shopping.

For years, EU residents have only had to show their national identity documents at the border. Had there been no deal, they would have had to have their passports stamped sparking fears of long queues “lasting hours”.

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BANKING

Banking giant Barclays to close all accounts of Brits living in Spain

UK nationals living in Spain have begun to receive letters from their bank telling them that their accounts will be closed, in an apparent post-Brexit change. Have you been affected?

Banking giant Barclays to close all accounts of Brits living in Spain

Customers of Barclays Bank who are living in Spain and other EU countries have been receiving letters telling them that their UK accounts will be closed by the end of the year. 

A number of readers of The Local’s network of news websites have contacted us to report receiving either letters or messages in their online banking telling them that their accounts would be closed because of their residency in Spain or in other countries in the EU.

A Barclays spokesperson told The Local: “As a ring fenced bank, our Barclays UK products are designed for customers within the UK.

“We will no longer be offering services to personal current account or savings customers (excluding ISAs) within the European Economic Area. We are contacting impacted customers to give them advance notice of this decision and outline the next steps they need to take.”  

Customers are being given six months to make alternative arrangements. The changes affect all personal current accounts or savings accounts, but do not affect ISAs, loans or mortgages.

During the Brexit transition period Barclays closed Barclaycard accounts of customers in Spain, but did not indicate any changes to standard bank accounts.

READ MORE: 

Around the same time several other British high street banks began closing accounts of British customers who live in the EU, although with the exception of Barclaycard customers in Spain who were largely spared.

Many UK nationals who live in Spain maintain at least one UK bank account – in addition to a Spanish account – sometimes just for savings but others use their accounts regularly to receive income such as pensions or income from rental property or – for remote workers – to receive income for work done in the UK.

Not having a UK bank account can make financial transactions in the UK more complicated or incur extra banking fees.

READ MORE: What are the best UK banks for Brits in Spain?

Since Brexit, the UK banking sector no longer has access to the ‘passporting’ system which allows banks to operate in multiple EU countries without having to apply for a separate banking licence for each country.

And it seems that many UK high street banks are deciding that the extra paperwork is not worth the hassle and are withdrawing completely from certain EU markets. 

When British banks began withdrawing services from customers in the EU back in 2020, a UK government spokesman told British newspaper The Times that “the provision of banking services is a commercial decision for firms based on a number of factors” so Brits in Spain probably shouldn’t hold their breath for any help from that direction.

READ ALSO: Premium Bond holders in Spain may have to cash in if no UK bank account

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