Spain vs. Gibraltar

Spain's powerful world empire of the 16th and 17th centuries ultimately yielded command of the seas to England. Subsequent failure to embrace the mercantile and industrial revolutions caused the country to fall behind Britain, France, and Germany in economic and political power. Spain remained neutral in World War I and II, but suffered through a devastating civil war (1936-39). A peaceful transition to democracy following the death of dictator Francisco FRANCO in 1975, and rapid economic modernization (Spain joined the EU in 1986) gave Spain a dynamic and rapidly growing economy, and made it a global champion of freedom and human rights. More recently, Spain has emerged from a severe economic recession that began in mid-2008, posting four straight years of GDP growth above the EU average. Unemployment has fallen, but remains high, especially among youth. Spain is the Eurozone's fourth largest economy. The country has faced increased domestic turmoil in recent years due to the independence movement in its restive Catalonia region.

Strategically important, Gibraltar was reluctantly ceded to Great Britain by Spain in the 1713 Treaty of Utrecht; the British garrison was formally declared a colony in 1830. In a referendum held in 1967, Gibraltarians voted overwhelmingly to remain a British dependency. The subsequent granting of autonomy in 1969 by the UK led Spain to close the border and sever all communication links. Between 1997 and 2002, the UK and Spain held a series of talks on establishing temporary joint sovereignty over Gibraltar. In response to these talks, the Gibraltar Government called a referendum in late 2002 in which the majority of citizens voted overwhelmingly against any sharing of sovereignty with Spain. Since late 2004, Spain, the UK, and Gibraltar have held tripartite talks with the aim of cooperatively resolving problems that affect the local population, and work continues on cooperation agreements in areas such as taxation and financial services; communications and maritime security; policy, legal and customs services; environmental protection; and education and visa services. A new noncolonial constitution came into force in 2007, and the European Court of First Instance recognized Gibraltar's right to regulate its own tax regime in December 2008. The UK retains responsibility for defense, foreign relations, internal security, and financial stability.

Spain and the UK continue to spar over the territory. Throughout 2009, a dispute over Gibraltar's claim to territorial waters extending out three miles gave rise to periodic non-violent maritime confrontations between Spanish and UK naval patrols and in 2013, the British reported a record number of entries by Spanish vessels into waters claimed by Gibraltar following a dispute over Gibraltar's creation of an artificial reef in those waters. Spain renewed its demands for an eventual return of Gibraltar to Spanish control after the UK's June 2016 vote to leave the EU, but London has dismissed any connection between the vote and its continued sovereignty over Gibraltar. The EU has said that Gibraltar will be ouside the territorial scope of any future UK-EU trade deal and that separate agreements between the EU and UK regarding Gibraltar would require Spain's prior approval.

periodic droughts, occasional flooding

volcanism: volcanic activity in the Canary Islands, located off Africa's northwest coast; Teide (3,715 m) has been deemed a Decade Volcano by the International Association of Volcanology and Chemistry of the Earth's Interior, worthy of study due to its explosive history and close proximity to human populations; La Palma (2,426 m), which last erupted in 1971, is the most active of the Canary Islands volcanoes; Lanzarote is the only other historically active volcano

note 1: strategic location on Strait of Gibraltar that links the North Atlantic Ocean and Mediterranean Sea

note 2: one of only two British territories where traffic drives on the right, the other being the island of Diego Garcia in the British Indian Ocean Territory

After a prolonged recession that began in 2008 in the wake of the global financial crisis, Spain marked the fourth full year of positive economic growth in 2017, with economic activity surpassing its pre-crisis peak, largely because of increased private consumption. The financial crisis of 2008 broke 16 consecutive years of economic growth for Spain, leading to an economic contraction that lasted until late 2013. In that year, the government successfully shored up its struggling banking sector - heavily exposed to the collapse of Spain's real estate boom - with the help of an EU-funded restructuring and recapitalization program.

Until 2014, contraction in bank lending, fiscal austerity, and high unemployment constrained domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 16.4% in 2017. High unemployment strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain's budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to about 3.3% of GDP in 2017. Public debt has increased substantially - from 60.1% of GDP in 2010 to nearly 96.7% in 2017.

Strong export growth helped bring Spain's current account into surplus in 2013 for the first time since 1986 and sustain Spain's economic growth. Increasing labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have improved Spain's export competitiveness and generated foreign investor interest in the economy, restoring FDI flows.

In 2017, the Spanish Government's minority status constrained its ability to implement controversial labor, pension, health care, tax, and education reforms. The European Commission expects the government to meet its 2017 budget deficit target and anticipates that expected economic growth in 2018 will help the government meet its deficit target. Spain's borrowing costs are dramatically lower since their peak in mid-2012, and increased economic activity has generated a modest level of inflation, at 2% in 2017.

Self-sufficient Gibraltar benefits from an extensive shipping trade, offshore banking, and its position as an international conference center. Tax rates are low to attract foreign investment. The British military presence has been sharply reduced and now contributes about 7% to the local economy, compared with 60% in 1984. In recent years, Gibraltar has seen major structural change from a public to a private sector economy, but changes in government spending still have a major impact on the level of employment.

The financial sector, tourism (over 11 million visitors in 2012), gaming revenues, shipping services fees, and duties on consumer goods also generate revenue. The financial sector, tourism, and the shipping sector contribute 30%, 30%, and 25%, respectively, of GDP. Telecommunications, e-commerce, and e-gaming account for the remaining 15%.

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well-developed and one of the largest telecom markets in Europe, with average mobile penetration for Europe; regulator has championed competition; LTE is nearly universal with shifts of service to 5G; operator joined government smart cities project; fixed-line broadband is backed by investment in fiber infrastructure; fiber broadband accounts for most of all fixed-line broadband connections; Chinese company Huawei contributes investment to the telecom sector; increased connectivity through submarine cable connection to Brazil; importer of broadcasting equipment from Europe (2021)

a mixture of both publicly operated and privately owned TV and radio stations; overall, hundreds of TV channels are available including national, regional, local, public, and international channels; satellite and cable TV systems available; multiple national radio networks, a large number of regional radio networks, and a larger number of local radio stations; overall, hundreds of radio stations 

in 2002, Gibraltar residents voted overwhelmingly by referendum to reject any "shared sovereignty" arrangement; the Government of Gibraltar insists on equal participation in talks between the UK and Spain; Spain disapproves of UK plans to grant Gibraltar greater autonomy; after voters in the UK chose to leave the EU in a June 2016 referendum, Spain again proposed shared sovereignty of Gibraltar; UK officials rejected Spain's joint sovereignty proposal; Morocco protests Spain's control over the coastal enclaves of Ceuta, Melilla, and the islands of Penon de Velez de la Gomera, Penon de Alhucemas, and Islas Chafarinas, and surrounding waters; both countries claim Isla Perejil (Leila Island); Morocco serves as the primary launching site of illegal migration into Spain from North Africa; Portugal does not recognize Spanish sovereignty over the territory of Olivenza based on a difference of interpretation of the 1815 Congress of Vienna and the 1801 Treaty of Badajoz

in 2002, Gibraltar residents voted overwhelmingly by referendum to reject any "shared sovereignty" arrangement; the Government of Gibraltar insists on equal participation in talks between the UK and Spain; Spain disapproves of UK plans to grant Gibraltar even greater autonomy