Located at the southern tip of the Iberian Peninsula, Gibraltar is a British overseas territory which shares a border with Spain. Under British rule since the 1713 Treaty of Utrecht, Gibraltar is self-governing in all matters except defence and foreign policy, which are the responsibility of the United Kingdom.
Spain has long claimed sovereignty over Gibraltar. However, the territory’s 1969 constitution states that there can be no transfer of sovereignty to another state (such as Spain) against the wishes of its people. A referendum in 2002 reaffirmed this position, when Gibraltarians overwhelmingly rejected the idea of joint sovereignty with Spain.
Before Brexit, Gibraltar was the only British Overseas Territory within the European Union. This made it the sole territory eligible to vote in EU elections and the Brexit referendum.
In June 2016, Gibraltar held a referendum on the issue of continued European Union membership. 96% of Gibraltarians voted to reject Brexit and remain in the EU, and turnout was a huge 84%. Despite its very high ‘Remain’ vote, Gibraltar’s EU membership was tied to the UK’s, so it automatically exited the EU when the UK formally left on 31 January, 2020.
Consequences of Brexit for Gibraltar
The UK’s decision to leave the EU in 2016 brought significant challenges for Gibraltar, particularly concerning freedom of movement and border controls. The territory was not included in the permanent UK-EU withdrawal agreement, and has instead been operating under ad hoc arrangements.
The 2020 Framework Agreement
On 31 December 2020, the UK and Spain announced a framework agreement for UK-EU negotiations on Gibraltar’s future relationship with the EU. This provisional agreement allowed freedom of movement for Gibraltar residents and EU nationals at the Spain-Gibraltar border to avoid disruption, a vital measure for Gib’s economy.
The 2020 deal also included provisions regarding environment policies, state aid, equal treatment for frontier workers, employment laws, cooperation on tax matters, social security and transport, police, and judicial collaboration.
Ongoing post-Brexit Negotiations
Since then, many rounds of negotiations between the UK, Gibraltar, Spain and the European Commission have taken place to secure a permanent agreement. One of the key provisions under discussion is Gibraltar’s inclusion in the EU internal border-free Schengen Area. This would allow free movement of people and goods at the Gibraltar-Spain border. However, current sticking points in the negotiations concern the issue of Spanish police patrolling and carrying out checks at external entry points to Gibraltar (under responsibility of Spain), as well as the status of Gibraltar airport which also has an RAF base and is managed by the Ministry of Defence.
However, freedom of movement remains the primary concern for the approximately 15,000 people who commute across the frontier each day. Since Brexit, stricter Spanish border checks and customs inspections have led to long queues and delays. Recent developments include the suspension of a Spanish police officer in March 2025 for conducting unauthorised passport stamping at the border. This caused significant disruption and highlighted the sensitive nature of the ongoing negotiations.
Another consequence of Brexit involved healthcare for Gibraltarians. When the reciprocal health care agreement came to an end on 30 June 2022, Gibraltar residents had to obtain travel insurance with medical cover in order to receive emergency healthcare in Spain and other EU countries.
Additionally, Brexit has created uncertainty for key sectors of Gibraltar’s economy, including financial services, online gaming, and tourism. These industries no longer have automatic access to EU markets, and some companies have relocated or moved parts of their operations to avoid Brexit-related restrictions.
The Road Ahead
In conclusion, it’s fair to say that during the 2016 Brexit referendum, few people probably imagined just how challenging Gibraltar’s withdrawal from the EU would be. Despite progress in negotiations on key issues related to the economy, trade and the environment, the future of Gibraltar’s relationship with the EU remains a complex and evolving issue.
The primary challenge continues to be the rules governing the border between Gibraltar and Spain, which affects thousands of daily commuters and the broader economy. All parties have expressed a commitment to reaching an agreement before the EU’s new Entry/Exit System (EES) takes effect later this year.
With negotiations still ongoing, Gibraltar finds itself in a delicate position—seeking to maintain economic stability and free movement while navigating the political sensitivities of sovereignty and border control. The outcome of these discussions will undoubtedly shape Gibraltar’s future for years to come.
Last Updated on April 2, 2025 by Vanessa Kingwell