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Gibraltar, a rocky outcrop with a population of 33,000, is threatening to embitter Brexit talks before they've even begun.
Prime Minister Theresa May had hoped Spain might be an ally in negotiations, but that's now in jeopardy after a spat over the disputed territory reached the point where a senior member of her party suggested May would be ready to go to war.
The Rock of Gibraltar, Britain's most southerly territory in Europe.
Michael Howard, a former Conservative Party leader, compared the simmering dispute with Spain over Gibraltar with the 1982 Falklands War between the U.K. and Argentina, when Margaret Thatcher was prime minister.
“I can see no harm in reminding them what kind of people we are,” Howard told Channel 4 News on Sunday.
The heated rhetoric, just four days after May triggered exit talks, hinted at the diplomatic minefield the U.K. will have to negotiate as it sets about extricating itself from the European Union, Bloomberg's Robert Hutton writes. It all started when guidelines for exit talks issued by EU President Donald Tusk gave Spain a determining say on whether any Brexit deal will apply to Gibraltar.
That move caused consternation in Britain and in Gibraltar, an area of less than three square miles nestled at Spain's southern tip. Britain has controlled it since 1713. Spanish ministers have suggested that they'll seek joint sovereignty of the rock, to the dismay of Gibraltarians, most of whom want to remain in the U.K. They also want to be part of the EU, and voted 96 percent in last year's referendum to remain.
Of course, there was more than Gibraltar in the EU's Brexit response. For more detail, Bloomberg Brexit editor Simon Kennedy outlines what we learned, while Brussels bureau chief Nikos Chrysoloras has put together a cut-out-and-keep guide to the dates that matter.
Today, Theresa May heads to Jordan to discuss British support for the Royal Jordanian Air Force in its attacks on Islamic State. From there she'll go to Saudi Arabia, whose intelligence services work closely with British counterparts. May has flaunted the U.K.'s security strengths as an asset the EU would continue to benefit from if a friendly Brexit deal is reached.
Plan B for Banks?
Canary Wharf, the financial, shopping and business district on the banks of the River Thames in London.
Financial services got a special mention in May's letter to the EU, with the prime minister saying she wanted a trade deal that would include them. But three senior officials in her team have raised concerns that an agreement on European access for London-based banks could be impossible, Bloomberg's Tim Ross reports.
One minister said discussions about a new regulatory framework for U.K.-based banks should be put aside to avoid holding up conversations about other sectors, such as manufacturing and agriculture. Another official said the idea of leaving a deal on banks until later was already being discussed in London and Brussels.
Robots Replace Migrants?
As the debate over post-Brexit migrant numbers continues, technology may have a solution: robots are poised to fill jobs held by European migrants.
A LocusBot autonomous machine. Is this the future of work in Britain?
Locus Robotics will start selling an autonomous machine that whizzes around storehouses in Britain this year, Bloomberg's John Ainger reports. ABB Ltd. of Switzerland supplies industrial robots to British pancake, poppadom and marshmallow producers. Fanuc Corp. of Japan, which makes computer-controlled machine tools for smartphone providers, plans a new U.K. plant.
Any fundamental changes in employment status and the jobs available could hit the three million EU migrants living in the U.K. We've broken down where EU residents in the U.K. come from, and where Britons are living in Europe, to see who that might affect. Click the map for more detail.
Brexit Bullets
- U.K. chief financial officers are the most optimistic in 18 months, according to a study by Deloitte
- Chancellor of the Exchequer Philip Hammond and BOE Governor Mark Carney visit India to make the case that London will remain a finance hub after Brexit
- Hammond repeats the trade vs. terror threat in Handelsblatt, saying failure to strike a post-Brexit trade deal would create problems in security cooperation
- Banks shouldn't wait till the last minute and shouldn't rely on equivalence rules when preparing for Brexit, Bundesbank Executive Board member Andreas Dombret tells Welt
- Brexit department is seeking a consultancy to ease its workload, offering £1.5 million over six months, FT reports.
And Finally...
The old British navy and current red EU passports.
Will Brexit see Britain's classic blue passport return, taking the place of the red EU document much-derided by Leave campaigners? The Telegraph and others report there's a chance it could happen, as the Home Office has put out a tender for a redesign of U.K. passports post-2019.
However, the Times reports the passports could end up being made by a European company under EU competition rules, enough, it says, to make the most patriotic Conservative MP see red.
For more on Brexit follow Bloomberg on Twitter, Facebook and Instagram, and see our full coverage at Bloomberg.com
To contact the author of this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net.
To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Andy Reinhardt
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