Spain’s Gibraltar border tax is a distraction from deeper Economic problems

Spain’s foreign Minister Jose Manuel Garcia-Margallo’s recent threat to impose a €50 toll on
vehicles crossing the Spain-Gibraltar border reflects nothing more than a cynical attempt to deflect
attention from the countries failing economy.
Unemployment in Spain is currently at 25% (second only to Greece in the Eurozone) and the IMF
last Friday warned it could remain that way for the next five years. With this grim forecast it is
perhaps unsurprising that a high ranking minister has attempted to draw the public’s gaze elsewhere
and Garcia-Margallo has wasted little time in attempting to stoke up some good old fashioned
nationalism with these mooted border restrictions.
Tensions between Spain and Gibraltar have been increased recently following disputes over fishing
territories and frustration over delayed renegotiations of sovereignty with the UK but the timing of
the IMF report adds an even more cynical edge to what Gibraltar’s Chief Minister Fabien Picardo
described as “sabre rattling”.
For the time being the proposal seems to have served its purpose. David Cameron has expressed
“serious concerns” over the planned toll which would financially ruin the thousands of residents
who make the daily commute into Spain to work.
However, the reality is this is not an official government proposal nor is it likely to become one.
Aside from the afore mentioned restriction on residents Gibraltar’s ability to work in Spain (an
action which would ironically further increase Spain’s unemployment problem) any border tax
would directly contradict the EU’s freedom of movement laws.
Given the IMF’s recent call on the Spanish government to create more flexible labour laws any
official move to restrict the movement of workers would be met with hostility from the European
Union and the global financial markets.
Spain’s economy is one of the worst performing in the EU and instead of the governments cheap
posturing it should be striving to implement the IMF’s recommendations such as negotiating more
flexible wage rates with the unions to offer lower wages but higher levels of employment.
In this instance it seems that the Spanish government has succumb to the temptation to become
more insular in times of financial strife, seeking to blame an external foe for it’s internal problems,
personified in this case by the UK and Gibraltar.
The economy of Spain will only suffer as a result of increased tensions with close trade partners
such as the UK. Failure to implement the necessary labour reforms will lead to severe economic and
political consequences for Spain.

By Thomas Mellor.

Tags: , , , , , , ,

Categories: International politics

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