Gibraltar in the Wake of Brexit: Unpacking the Spanish Veto

The views and opinions expressed in this article are those of the authors only.

Hunter Davis

Vol. 39 Notes Editor

In the wake of the UK’s withdrawal from the European Union (“Brexit”), a challenge to British sovereignty over Gibraltar has emerged. On April 29, 2017, the European Council unanimously adopted the Framework for Negotiations Under Article 50 (“the Framework”).[1] While the bulk of the Framework lays out broad goals and timelines, the Framework also requires the UK to pre-clear with Spain any agreements relating to Gibraltar before taking them up with the EU.[2] This has been referred to as the “Spanish veto.” This provision has been the cause of great controversy. Members of European Parliament (MEP) including Isabella De Monte, claim that Clause 24 is illegal. [3] Experts have also suggested that the European Court of Justice (ECJ) could rule that the veto is in breach of EU law.[4] The crux of this argument is that the veto would give Spain special status among EU nations without sufficient objective justification. This conflicts with the fundamental principle of Member State equality.[5]

Grounding Member State Equality in EU Law

Member State equality has emerged from a variety of sources. Borrowing heavily from equality and anti-discrimination precedents, the ECJ annunciated a framework for Member State equality in Poland v. Commission. Here, the Court held that the EU “shall respect the equality of the Member States before the Treaties, which precludes any unjustified inequality between the Member States.”[6] In other words, an advantage may not be bestowed on one state as opposed to another in the absence of an adequate justification based on objective criteria.[7] The drafting history of the Lisbon Treaty and the text of Article 4(2) also helped solidify Member State equality. During the drafting process of the Lisbon Treaty, states like Cyprus, Lithuania, and Austria stressed the importance of Member State equality as an institutional principle. Some delegations, including Portugal, called for the treaty to explicitly establish a principle of Member State equality.[8] Accordingly, The Lisbon Treaty grounded Member State equality in EU primary law via Article 4(2) of the Lisbon Treaty.[9]  This stipulation calls on the Union to “respect the equality of Member States before the Treaties.”[10] Finally, the structure and voting patterns of EU institutions provide additional treaty support for the importance of Member State equality. For example, the Council is comprised of a singular minister representing each Member State for a total of twenty-eight ministers.[11]  Member States are thus equally represented within the Council. Voting patterns within the Council help solidify the objective justification framework. Eighty percent of Council votes require qualified majority voting (QMV), which is a bifurcated procedure demanding the consent of fifty-five percent of Member States[12] plus the support of countries comprising at least sixty-five percent of the total EU population.[13] While QMV appears facially inconsistent with Member State equality, the importance of citizen equality within the EU provides an objectively reasonable basis for differentiation.[14]

Application to the Spanish Veto

In analyzing the legality of the Spanish veto, the ECJ must consider two questions: whether there is differential treatment of similarly positioned entities and if so whether there is sufficient justification for this treatment.[15] First, it is clear that Clause 24 establishes differential treatment among states in the EU. As a result of this provision, whenever the EU wants to forge an agreement with the UK pertaining to Gibraltar, the UK and Spain must first reach consensus.[16] As Italian MEP Isabella De Monte has pointed out, Clause 24 grants Spain a “differentiated right in comparison with all the other EU Member States.”[17] No other nation is endowed with this pre-clearance power. Since Clause 24 treats Spain dissimilarly from other EU states, it is necessary to ascertain whether the differentiation is objectively justified. The Council will likely contend that Spain’s proximity to Gibraltar requires special, differentiated power. Although this explanation appears adequate on its face, the sufficiency of any justification depends on context.[18] In the case of Clause 24, the factual and legislative context reveals the true objective for the measure: Spanish sovereignty over Gibraltar.[19] Gibraltar is a historically contested piece of land. The island was a Spanish colony before it was ceded to England in the Treaty of Utrecht in 1713.[20] Spain has disputed the status of Gibraltar since the eighteenth century. Accordingly, it is unsurprising that Spain was responsible for inserting Clause 24 into the draft negotiating position.[21] Although neutral justifications for this insertion can be devised post hoc, Spanish politicians have been transparent about their sovereignty aims. For example, in the wake of the Brexit vote, Spain’s Minister of Foreign Affairs José García-Margallo vowed to “plant his flag” on the Rock of Gibraltar. [22]  Such blunt assertions make clear Spain’s intent to utilize Clause 24 as a means of gaining sovereignty over Gibraltar and do not warrant an exercise of ECJ discretion. Spain’s sovereignty aims behind Clause 24 fall flat as an objective justification. First, acceding to Spanish sovereignty aims conflicts with EU traditions on the Gibraltarian conflict. While Spain has disputed British dominion over Gibraltar, the ECJ has continually asserted that “Gibraltar . . . is a Crown Colony for whose external relations the United Kingdom is responsible.”[23] Second, Spanish objectives directly interfere with the legal principle of sovereignty and  with wide recognition under international law that the UK is the sole sovereign over Gibraltar.[24] Under international law, states are endowed with exclusive power over their territory and internal affairs.[25] The Spanish veto is at odds with UK sovereignty over Gibraltar, [26] as it vests Spain with pseudo-sovereign rights over the island.[27] Under the veto, Spain can unilaterally make major decisions for Gibraltar, as any agreement that the UK seeks to forge with the EU with respect to Gibraltar would need the consent of Spain.[28] Spain’s indirect control over the internal affairs of Gibraltar would compromise the political independence of Gibraltar and the UK. This interference is perhaps most clear in the economic realm, as the Gibraltarian economy is heavily dependent upon the EU.[29] Without the ascent of Spain, Gibraltar may not reestablish its strong ties with the EU as a focal point of its economy.[30] Third, granting Spain the veto is a slippery slope, as it may spur on similar procedural favoritism for other states. Vesting various states with differentiated voting powers would complicate the lawmaking process within the EU, and lead to stagnation and internal conflict. It is unclear if upholding the Spanish veto will lead to a swell in similar procedural favoritism. Spain was vested with the veto on a unanimous basis. If similar procedural favoritism required unanimity, the capacity of any one state to object suggests that a swell in differentiated powers is unlikely. Nevertheless, the ECJ is imbued with great discretion in objective justification determinations. Although predicated on inferences and insufficient as a stand-alone argument, the potential adverse political outcomes could influence the Court.[31] Finally, in assessing the legality of Clause 24, it is important to take note of the discretion of the ECJ and the role of public perception. Policy considerations are of immense importance and can indeed impact the decision of the ECJ.[32] Some perceive Clause 24 as an indication that the EU is favoring Spain in its sovereignty battle over Gibraltar.[33] Granting Spain this differentiated power could undercut the EU’s authority across the Union and internationally. The ECJ ought to keep in mind the negative implications associated with the Spanish veto and refrain from upholding Clause 24’s validity. Although the ECJ should not uphold Clause 24 of the Framework, ultimately, shared sovereignty between Spain and the UK may indeed be the best solution to the Gibraltar issue. Even without Clause 24, there are a variety of legal avenues by which Spain can exert immense pressure on Gibraltar.[34] Shared sovereignty is by no means ideal for the UK or Gibraltar; both adamantly oppose the idea.[35] However, in the wake of Brexit, Gibraltarian vulnerability may require a reassessment of priorities. Nearly ninety-six percent of the island voted to remain in the EU.[36] In a shared sovereignty arrangement, Gibraltar could continue to enjoy the benefits of EU membership under the purview of Spain.

[1] Id.; James Crisp, Spain’s ‘Veto’ Over Brexit Deal for Gibraltar Could Be Illegal, Telegraph (Aug. 3, 2017), http://www.telegraph.co.uk/news/2017/08/03/spains-veto-brexit-deal-gibraltar-could-illegal/. [2] See e.g. EU Council Ducks Thorny Veto Question, Gibraltar Chronicle (Oct. 7, 2017), http://chronicle.gi/2017/10/eu-council-ducks-thorny-veto-question/. [3] See Isabella De Monte, Legal Basis of Spain’s Right of Veto Relating to Gibraltar, Parliamentary Question, P-004897-17 (July 17, 2017). [4] Crisp, supra note 1. [5] See Isabella De Monte, Legal Basis of Spain’s Right of Veto Relating to Gibraltar, Parliamentary Question, P-004897-17 (July 17, 2017). [6] Id. at §35. [7] See Id. [8] Jean-Claude Piris, The Lisbon Treaty–A Legal and Political Analysis 85-86 (2010). [9] In fact, the Court in Poland explicitly references the Lisbon Treaty in establishing the link between Member State equality and the discrimination/equality framework. See C‑358/14, Republic of Poland v. European Comm’n; 2006 E.C.R. §35. [10] Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the European Community, Dec. 13, 2007, 2007 O.J. (C306) 1, Article 4(2). [11] The European Council, Consilium Europa, http://www.consilium.europa.eu/en/european-council/ (last visited Dec. 5, 2017). [12] I.e. at least 16 out of 28. [13] Id; see Alina Kaczorowska-Ireland, European Union Law 412 (4th ed. 2016). [14] Citizen equality is crucial within the EU, as the EU is not merely an international organization of states, but a union of states and citizens. See Piris, supra note 8. Citizen equality is enshrined in Article 9 of the Lisbon Treaty, which states that “[i]n all its activities, the Union shall observe the principle of the equality of its citizens, who shall receive equal attention from its institutions, bodies, offices and agencies.” Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the European Community, Dec. 13, 2007, 2007 O.J. (C306) 1, Article 9. [15] Id at 189. [16] See Isabella De Monte, Legal Basis of Spain’s Right of Veto Relating to Gibraltar, Parliamentary Question, P-004897-17 (July 17, 2017). [17] See Isabella De Monte, Legal Basis of Spain’s Right of Veto Relating to Gibraltar, Parliamentary Question, P-004897-17 (July 17, 2017). [18] See Takis Tridimas, The General Principles of EU Law 83 (2d ed. 2006). [19] See Brexit: Gibraltar Angered by Spain’s EU ‘Veto,’ BBC (Apr. 1, 2017), http://www.bbc.com/news/uk-politics-39453535. [20] See European Union Committee, Brexit: Gibraltar, 2016–17, HL Paper 116, at 5 (UK). [21] “An EU source told the BBC the inclusion of the Gibraltar issue in the document had come after lobbying from Spain.” See Id. [22] Prior to the Brexit vote, García-Margallo also warned that Spain would seek to reclaim Gibraltar in the immediate aftermath of the UK’s exit from the EU. See James Badcock, Spain’s Foreign Minister Vows to ‘Plant His Flag’ on Gibraltar, Telegraph (Oct. 6, 2016), http://www.telegraph.co.uk/news/2016/10/06/spains-foreign-minister-vows-to-plant-his-flag-on-gibraltar/. [23] See e.g. Case 30-01, Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland, 2003 E.C.R. 9510. See also Case C‑145/04, Spain v United Kingdom, 2006 E.C.R. 7961; Case C-192/16 Reference for a Preliminary Ruling — Article 355(3) TFEU — Status of Gibraltar 2017 E.C.R. 1, 2. [24] See e.g. Case C-192/16 Reference for a Preliminary Ruling — Article 355(3) TFEU — Status of Gibraltar 2017 E.C.R. 1, 2 “it is common ground that Gibraltar is classified as a non-self-governing territory, within the meaning of Article 73 of the Charter of the United Nations.” [25] See GA Res. 2625 (XXV), UN Doc A/RES/25/2625, (Oct. 24, 1970). Under Article 21(1) of the Lisbon Treaty, the EU is compelled to respect “principles of the United Nations Charter and international law.” Accordingly, any explanation for differentiation predicated on interfering with the sovereign rights of another state should fail as an objective justification. [26] Although the UK maintains sovereignty over Gibraltar, the island is largely self-governed. Accordingly, I will discuss sovereignty concerns with respect to “Gibraltar and the UK.” [27] There is an argument to be made that the Spanish veto does not raise sovereignty concerns at all. Under the principle of Weshphalian sovereignty, a state’s protection from external influence is limited to its domestic affairs.^. Stephen D. Krasner, Abiding Sovereignty, 22 Int’l Pol. Sci. Rev. 229, 232. However, by structuring its economy around EU trade agreements and benefits, Gibraltar and the UK have moved beyond purely internal affairs into the unprotected international realm. Globalization is indeed a threat to traditional conceptions of sovereignty and the drawing of clear lines between internal and external affairs, yet sovereignty has remained a flexible and resilient concept.  See id. at 234. Because Gibraltar is unique in its size, structure, geography, and subsequent dependence on the EU, Spain’s power is particularly intrusive and ought to be construed as an illicit intrusion into the internal affairs of Gibraltar and the UK. [28] This is of particular practical importance for measures necessitating QMV. [29] The Gibraltarian economy is heavily reliant upon the EU in a number of ways. First, the economy is built upon the labor of “frontier workers” who cross into Gibraltar from Spain daily. The free movement of workers has been described as so integral to Gibraltar that its economy could collapse in its absence. See Andy McSmith, Gibraltar Faces ‘Existential Threat’ to its Economy if there’s a ‘Hard Brexit’ Deal, its Chief Minister Warns, Independent (Aug. 20, 2016), http://www.independent.co.uk/news/uk/gibraltar-existential-threat-economy-hard-brexit-deal-eu-fabian-picardo-a7201211.html. The tourism industry is similarly reliant on the free movement of persons. Gibraltar’s economic development has also been aided by EU funding. See European Union Committee, Brexit: Gibraltar, 2016–17, HL Paper 116, at 28 (UK). Finally, Gibraltar’s shipping industry, which comprises 25% of the island’s GDP relies heavily upon relations with the EU. See Economy: Gibraltar, CIA, https://www.cia.gov/library/publications/the-world-factbook/geos/gi.html (last visited December 8, 2017).  In sum, cutting off Gibraltar’s access to the EU could have a “disproportionately severe effect” on Gibraltar’s economy see James Badcock, Spain Plans to End Gibraltar’s ‘Privileged’ Existence as a ‘Tax Haven’ in Brexit Negotiations, Telegraph (May 3, 2017), http://www.telegraph.co.uk/news/2017/05/03/spain-plans-end-gibraltars-privileged-existence-tax-haven-brexit/. [30]See European Union Committee, Brexit: Gibraltar, 2016–17, HL Paper 116, at 7-9 (UK). [31] See Tridimas, supra note 18 at 74. [32] See Tridimas, supra note 18, at 74. [33] See Rebecca Perring, Blow for Spain: Juncker says Gibraltar Will leave EU with Britain in Snub to Madrid, Express (July 10, 2017), https://www.express.co.uk/news/world/826881/UK-gibraltar-brexit-news-Spain-rock-leave-EU-sovereignty-Jean-Claude-Juncker. [34] Spain can still categorically block all legislation pertaining to Gibraltar that demands unanimity. Additionally, with or without Clause 24, Spain has control over Gibraltar’s European border. Unfettered access to Spain is important to Gibraltar for everything from tourism, to filling out its work force, to access to food and medical care. In the absence of EU supervision post-Brexit, Spain can manipulate its control over the border to put immense pressure on Gibraltar. Finally, Section 5 of the Annex suggests that it is entirely possible that Clause 24 would be legal if incorporated into the withdrawal agreement itself. [35] Upwards of 99% of Gibraltarians rejected a proposal for joint sovereignty in 2002. In the wake of Brexit, both the UK and Gibraltar have been adamant that they oppose joint sovereignty moving forward. [36] European Union Committee, Brexit: Gibraltar, 2016–17, HL Paper 116, at 3 (UK).

Vol 39. Online Editor: Sara Shea