Spain’s attempt to get EU to hit Gibraltar

By David Eade
Given the good relations Gibraltar has now established with the EU in our own right our government needs to use those to ward off a new attack by Spain.

The Ministro de Hacienda y Administraciones Publicas, Cristobal Montoro, says that Spain has signed an accord with other European countries to form a working group to force the EU to eradicate what Spain calls "paraisos fiscales".

Montoro has Gibraltar firmly in his sights and confirmed Spanish media reports that the Agencia Tributaria had formed a working group to stamp out tax evasion; specifically the millions of euros Madrid insists are implanted in companies registered in Gibraltar.

Now of course our financial centre insists it is no longer an off-shore location and is very much on shore. We are compliant with all the legislation aimed at cracking down on money laundering and tax evasion. We have signed tax information exchange agreements with 20 countries but not with Spain because it refuses to do so. Madrid insists such agreements should be signed by the UK on our behalf.

There well may be concern amongst EU members States over tax avoidance and the existence of off-shore fiscal "chiringuitos" as Madrid insists on calling them. The fact that it has now been discovered that such bases have been used to hide illicit funds stashed away by those close to the PP hierarchy must be a great embarrassment to Montoro and the rest of Rajoy's government.

However there should be no doubt the intention of Madrid is to use this EU group of nations to inflict harm on our financial centre. Whilst the other nations will be looking to crack down on genuine cases where jurisdictions are harming other nation's economies by tax evasion Spain will want them to concentrate their fire on us for malicious reasons alone. It is not clear who these other European countries are or whether the UK is amongst them.

Writing in El Pais on Monday Jesus Servulo stated that Spain considers Gibraltar to be: "un paraíso fiscal por el que cada año cientos de millones de euros escapan al control fiscal y se evaden".

One must presume that El Pais is reflects Spanish Government thinking when Servulo writes that Gibraltar functions in reality as one of the territories denominated as off-shore and that major businessmen (and perhaps also businesswomen) on the Costa del Sol send their assets here in order to evade tax.

Of course apart from Madrid's intention to bring Gibraltar's economy down as part of the war over sovereignty there is the jealousy generated by Spain being in financial meltdown. Servulo even speculates that our GDP growth could be as high as ten per cent, a figure which would delight our government but which sadly is probably some way above what is reality. Needless to say growth is currently a word absent from the Spanish economic vocabulary.

What is important is that we use our new close contacts in Brussels to establish the on-shore credentials of our finance centre and economy. It won't stop Spain attacking us but the EU must see those attacks for what they are. Madrid vitriol is not a genuine reflection of our economy or finances.