02 April, 2017
In guidelines unveiling the EU's position in upcoming negotiations for Britain to exit the bloc, a clause stipulates that Spain must have a say over whether any post-Brexit deal applies to the tiny rocky outcrop at the southern tip of the Iberian peninsula Madrid has long wanted back.
Llamas also said he was optimistic that Spain would use "common sense" over Gibraltar in future Brexit negotiations.
"Brexit is already complicated enough without Spain trying to complicate it further", the BBC quoted Picardo as saying.
After the "veto" row broke, Foreign Secretary Boris Johnson spoke on Friday with Gibraltar's chief minister Fabian Picardo in a bid to reassure him of the UK's continued support.
After his talks with Mr Picardo, the Foreign Secretary said: "As ever, the United Kingdom remains implacable and rock-like in our support for Gibraltar".
William Chislett, an associate analyst at Elcano Royal Institute, noted that the key issue for Gibraltar is not the single market, as 90% of business is done with the United Kingdom itself, but the border, as it becomes an external one when the United Kingdom leaves the EU.
However, British Prime Minister Theresa May had not mentioned Gibraltar once in her 2,200-word letter triggering Article 50 (the official process of leaving the EU), starting the Brexit process.
Spain has had long ambitions to reclaim sovereignty over Gibraltar.
Spain, which claims sovereignty over "the Rock", which it ceded in 1713, has frequently irritated its European Union partners with attempts to use European Union negotiations to put pressure on Gibraltar.
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This unnecessary, unjustified and unacceptable discriminatory proposed singling out of Gibraltar and its people was the predictable machination of Spain that the people of Gibraltar foresaw and one of the reasons why we voted so massively to remain in the EU.
Mrs May had clearly stated the UK's double-lock commitment never to negotiate on sovereignty against the wishes of the Gibraltarians.
In a statement, the Opposition flagged how on Thursday evening the Attorney General Michael Llamas told the Gibraltar Federation of Small Businesses that he felt confident Spain would not want to be seen by its European partners as being unreasonable by vetoing an entire deal between the United Kingdom and the EU because of its position in respect of Gibraltar. "It recognises that there are two parties to this dispute", an European Union source told the newspaper.
Picardo said the European Union guidelines would complicate Brexit talks even further but vowed that they will inflict no change to Gibraltar's "continued, exclusive British sovereignty".
Llamas also said Gibraltar was looking at securing a bilateral agreement with Spain over local border traffic regulation after the implementation of the new Schengen border amendments. "It's one of the moments in history where there's a change in the background conditions that allows you to push for something", said Antonio Barroso, an analyst at the political risk advisory firm Teneo Intelligence.
At the same time, negotiation guidelines set out by Mr Tusk appear to put the future of Gibraltar at stake by giving Spain a veto in discussions about the Rock's future.
Gibraltar's government has ruled out any dilution of sovereignty in return for continued access to the European single market or other benefits attached to EU membership.
A spokesman for the Spanish government said Madrid was satisfied with the decision.