A Spanish border town that relies economically on the ability to cross in Gibraltar is at risk of economic chaos following a breakdown in Brexit negotiations. La Linea, a small town in Cadiz, sits close to the border with the British Overseas Territory. Nearly one-third of the town’s 63,000 inhabitants rely on being able to cross the border each day for work, but a breakdown in talks for a post-Brexit treaty has put many livelihoods at risk.
The uncertainty has seen the President of the Regional Government of Andalucia Juanma Moreno meet with the town’s Mayor Juan Franco to pledge support in a post-Brexit landscape. Reports suggest that the regional government is considering economic measures to ease the impact of increased border checks for the town’s residents.
One measure under consideration is the imposition of a special fiscal regime similar to the Canary Islands to ease the burden on workers.
The Canary Islands currently offers a corporate tax rate of just 4% if companies meet strict conditions such as creating jobs and making investments in the islands.
It is hoped that easing tax requirements for those affected could ease a perceived unfairness between tax in Spain and Gibraltar, with the Spanish paying 25% compared to 15% on the island.
Following Brexit, the border between Spain and Gibraltar has become an entry point for the European Union, bringing with it the prospect of increased checks for those passing through.
Since Brexit, Spain has so far resisted introducing measures that could increase process time across the land border.
Currently, Gibraltar citizens have red ID cards, which allow them to cross into Spain without requiring their passport to be stamped or having to provide further evidence of their reasons for travel.
But on occasions,the border has seen long queues form, sparking fears of posturing and tit for tat retaliations as treaty negotiations falter.
London and Brussels have been locked in negotiations over a new common travel area between Gibraltar and Spain, but have not yet been able to strike a deal.
In October, 12,000 protesters took to the streets of La Linea, demanding a Brexit treaty.
The protest, organised by local officials and supported by political and social groups, called for “special measures” to protect the city’s economy.
