Brussels has insisted that specific divorce terms for the British Overseas Territory must be first signed off by Spain – effectively giving Spain the power to block the UK’s entire exit deal.
Madrid has long complained about the Rock’s status as a British territory and attacked it over its tax rules and environmental issues as well as claiming tobacco smugglers use the territory to move cigarettes into Spain.
The Spanish government has used its veto as an opportunity to push for more control over Gibraltar – particularly its airport – and as a way to force concessions on some of its demands.
But while the issue of sovereignty is now off the table, Gibraltar has revealed some of these issues will be addressed in “separate arrangements with Spain” as the Brexit negotiations enter their final stage.
A statement issued by the Gibraltar Government today said: “An agreement which provides for Gibraltar’s orderly withdrawal from the European Union is almost complete.
“There are a few issues that remain to be ironed out and the overarching principle of the discussions remains that nothing is agreed until everything is agreed.”