Pedro Sanchez, the Spanish prime minister, has taken personal control of the contingency planning and will officially launch it in January after a vote by MPs on Mrs May’s withdrawal terms. Plans come after the powerful European Commission warned remaining member states to ramp up their own personal protections for Britain crashing out of the bloc without a deal. Madrid’s contingency planning will mainly cover aviation, citizens’ rights, banking and the controversial issue of Gibraltar, the British overseas territory.
“In the worst of all cases, there would be internal measures to protect the interests of affected citizens,” a Spanish government source said.
Spanish airline Iberia, which is part of British aviation group IAG, could be devastated by a no-deal divorce because the company would become a non-EU firm as soon as Brexit happens.
Under Commission rules, Iberia would become a non-EU firm unless it applies changes to its structure to show Brussels that its majority shareholders are European.
Trade will also be covered because the UK represents Spain’s fourth largest export market.
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Madrid has already released a number of estimates as to how much bolstering its customs officials will need in terms of resources.
But, under the new plans, Spain is expected to establish how its official credit institute can offer financing to companies in order to navigate any difficulties brought by a no-deal Brexit.
Citizens’ rights will be at the forefront of plans as Spain hosts the largest community of British expats (around 300,000) across the EU and a high number of Spaniards live in the UK (116,000).
Madrid is hoping to agree a reciprocal deal with Britain that will bilaterally agree to maintain the current rights of both UK and Spanish citizens living in both countries.
The plans will see a deal that will guarantee rights of residency, healthcare and recognition of academic qualifications.
In the event of a no-deal Brexit, Gibraltar will not be covered by any offers made from Brussels to Britain.
The Rock, where British sovereignty is disputed by Spain, could be hardest bit because the EU contingency planning “will not apply”.
Spain will likely offer another a reciprocal deal to London to maintain the bilateral Brexit deals, which guarantee an understanding on four areas of potential friction – the movement of citizens, tobacco smuggling, tax issues and environmental disputes.
MPs will take part in a rescheduled vote on Mrs May’s controversial withdrawal agreement in the week beginning January 14.
The Prime Minister will use the days after MPs’ 17-day Christmas recess to win over extra support after pulling the initial vote in December because it would have been defeated by a “significant margin”.
Labour Party leader Jeremy Corbyn has demanded Mrs May cut short the MPs’ break short to hold the vote early.
He said the vote must happen “as soon as possible” but his request was dismissed as a “silly demand” by a Downing Street source.