In the wake of the Brexit Referendum, neighbouring town La Linea has felt the pinch of Britain’s impending exit from the EU. But how might it affect cross-frontier movement and who could be the long-term impact of the sleepy Spanish city?
There has been no shortage of media coverage on the potential fallout of Brexit and what impact it could have on Gibraltar. And with the two year anniversary of the fateful Brexit referendum having just passed, some movement has been made on the UK government’s part to formulate a plan on how Gibraltar can continue to thrive as a European business hub which boasts quality links with the rest of the continent.
In these two years, a handful of governmental working groups have been established between Gibraltar and the UK and even Spain to ease the complications that are expected to arise both in business and freedom of movement across the frontier. Gibraltarians have been assured over and over again that our livelihoods will remain intact no matter how the Brexit negotiations will pan out. Or, well, words to that effect. However, one facet of the community that has not had its worries completely allayed is Gibraltar’s closest neighbour, the bordering Andalusian town of La Linea. With a population of 70,000, including the surrounding urbanisations of Santa Margarita and La Alcaidesa, 14% cross the frontier each day to work in Gibraltar, where the rate of unemployment is just 1% – a whopping 34% lower than that of La Linea.
“Currently we have an economic dependency in La Linea on the economy of Gibraltar as we don’t have any major companies, only small and medium ones,” La Linea Mayor and long-standing member of the local council, Juan Franco Rodriguez, tells me. “In that context we practically completely depend on them. I believe [we are] the only territory in all of continental Europe that is feeling the effects of Brexit, as from the day following the referendum.”
On June 24 2016, La Linea woke up not only to the result it was dreading most, but also a 27% drop in the value of the pound against the euro, causing an immediate hit to the already weakened La Linea economy and its flurry of frontier workers. The euro has continued to suffer in the wake of the Brexit referendum outcome causing the city to suffer a £13.7m loss that year.
“La Línea is the only Spanish and continental European city affected by Brexit as from day one. The referendum left a very negative impact in the local economy,” EU consultant and La Linea native, Lola Uña Cardenas, laments. “I am from La Linea, but living and working and engaged with EU policy making in Brussels for over 16 years now. In this personal capacity, I am trying to raise awareness and voice the concerns on the impact that Brexit is already having and will further have in our city.”
According to a report on the socio-economic impact of Brexit on La Linea compiled by the ayuntamiento (local council), Gibraltar contributes approximately £587m a year to La Linea’s economy with a big chunk attributed to Gibraltarians shopping and eating out in the neighbouring town, and cross-frontier workers living and spending their salaries in La Linea.
The report claims 50% of the 10,000 workers are expats living in La Linea and the surrounding areas and Sr Franco tells me 41% of those work within online gambling and company services. Their combined salaries are calculated to be around £207m a year.
In March Sr Franco set out to find a voice for his town at a European level, in the midst of complex and cut-throat Brexit deliberations between the UK, Gibraltar and the EU. His mission was to relay La Linea’s struggles to EU and European commission officials and establish a strategy at EU level that will help keep La Linea afloat in the face of a hard Brexit. Sr Franco insisted he was, overall, pretty optimistic about his upcoming meetings.
Back on home turf, Sr Franco says the ayuntamiento has frequent meetings with the Gibraltar government and the cross-frontier workers’ associations on how to inject fresh investment in the city. He has also established a line of communication with the central Spanish government which has expressed willingness to enforce any of the concrete measures presented to them by Sr Franco to protect La Linea’s livelihood.
It’s certainly a challenging feat for a city that has long been the underdog of Andalucia, unable to compete with the vast shipping industry of Algeciras and industrial work of Los Barrios. La Linea has stood in Gibraltar’s shadow since before the frontier closed in 1969, but, in all honesty, is a welcome little brother for the Rock, particularly in providing a necessary workforce on the Rock.
The sleepy seaside city was my home for 12 years following my parents’ decision to uproot us from one quiet fishing port in southern Kent to its southern Spanish counterpart. And while for many years La Linea was very much lacking in a lot of favourable qualities, not least the English speaking children in my neighbourhood, I came to realise it’s certain Spanish charm in my late teens during the long and outstretched summer evenings. And then there’s its ever growing community of expats and their penchant for dining out every night of the week, because frankly, La Linea is great value for money.
And while the city is at something of a standstill in formulating its political strategy for the future, local lawyers and business owners have discussed the potential of taking a multi-jurisdictional approach following Brexit, with some Gibraltar-based businesses establishing a base in La Linea. In an article on legal analysis site, Mondaq, Partner at Hassans, Nigel Feetham, wrote: “The possibilities for cooperation between Gibraltar and La Linea that takes advantage of what each other has to offer is not just limited to insurance but can be extended equally to other areas including financial services and gaming.”
He remarks on synergies in the e-gaming industries of both Spain and Gibraltar that could enable online gambling companies access to the wider European market come March 2019. “Gibraltar provides that natural entry point (both geographically and in terms of its existing infrastructure), and La Linea sits at Gibraltar’s doorstep. La Linea, in turn, offers abundant physical space, and the Campo de Gibraltar an equally abundant and skilled workforce. Spain also has the important benefit of a knowledgeable and approachable Spanish regulator,” Feetham continues in his post.
What is overly positive is that there is movement underway and both the Gibraltar government and La Linea council are exploring alternative avenues that could benefit the two economies. And following his efforts in Brussels, Sr Franco is confident he has the support of some of the leading EU policy makers.
BY NICOLE MACEDO