When the PSOE politician Gemma Araujo took office as the mayor of La Linea last July 11, one of the first things she did was order a physical gesture aimed at repairing the damage caused to cross-border relations by her Popular Party predecessor, Alejandro Sánchez. Early one weekday morning, she watched as municipal workmen demolished the infrastructure put in place by the former PP mayor as part of his failed plan to impose a charge on vehicles leaving Gibraltar. It was a token that was well received on the Rock, where people had breathed a collective sigh of relief at the departure of Mr Sánchez and his team.
Now, in a wide-ranging interview with B2B, Mrs Araujo leaves no doubt that La Linea´s town council sees Gibraltar not as a threat, but as an ally. La Linea, she concedes, is verging on bankruptcy. Gibraltar, she quickly adds, will play a significant role in its economic recovery.
“I believe Gibraltar´s role is crucial,” she says. “It was important to make a gesture and show Gibraltar that we were different, that our intentions were not the same as the PP’s.”
“All the municipalities have been hit by the crisis and unemployment, but La Linea has always had the salvation that you can go and work in Gibraltar.”
“In that respect, we also have to be self-critical as an administration. People go to work in Gibraltar because we have not been able to generate employment here, or in the surrounding areas.”
“Gibraltar has been the cushion that has softened the blow of the economic crisis in La Linea, even though the impact has nonetheless been significant.”
Mrs Araujo, 32, illustrates that economic contribution by reflecting on the damage caused by Mr Sánchez´s tough position on the Rock. Mr Sánchez had rarely recognised that Gibraltar was a source of direct and indirect revenue for La Linea and the surrounding Campo de Gibraltar. He had opted instead for a negative analysis, arguing that La Linea was vital to the Rock ´s success but that the town did not benefit from it. That entrenched position – and most of all, the hare-brained toll idea -led to many Gibraltarians avoiding the Spanish border town in protest. For the new PSOE mayor, the PP had followed a flawed strategy that backfired and impacted negatively on La Linea.
“For us, Gibraltar is an opportunity,” Mrs Araujo says. “Not only because there are Spanish people working there, but because of the opportunities for Gibraltarian interests to set up here and, above all, because of the revenue created by Gibraltarians who come across the border to shop here.”
“There is no doubt that those revenues dropped during that time and I regret the silence that there was on this issue, which was directly impacting on the economy of our municipality. During this period of direct confrontation under Alejandro Sánchez – and I personalise it in him because time has shown that it was his policy, not that of the wider municipality – there was a significant drop in that source of revenue, and we and our businessmen noticed that.”
“We realised the significant income that Gibraltar generated for our community.”
“I think we need to forget this period.”
Difficult Times
Mrs Araujo took office at a time when La Linea was reeling economically. The city has nearly 10,000 people registered as unemployed. Its town council owes tens of millions of Euros and cannot even afford to pay its 850-strong workforce. Every day outside her office, union activists and municipal workers protest loudly over unpaid wages. It has been this way for over a year and the protests have, on occasion, led to severe disruption to frontier traffic. When she became mayor, the workers were owed over €5m in unpaid salaries. Although some of that has now been paid off, the bill continues to rise. La Linea, its new mayor admits, requires some strong medicine.
To explore how Gibraltar might play a role in La Linea´s economic recovery, it is first necessary to understand the depth of the problems its town council faces. The monthly bill for municipal salaries is currently €1.4m, without including social security payments. La Linea receives €15m from the state every year but those payments are currently frozen because the council has a debt for social security and tax running to nearly €40m. From the Junta de Andalucia it receives €2.8m, while its taxes are collected on its behalf by the Diputación de Cádiz and amount to some €18m.
“With that income, a normal town council would have enough if the bill for salaries was lower,” Mrs Araujo says. “That is our objective, reducing the salary bill.”
“When all the income that a town council receives is earmarked to pay salaries, then other services suffer and that is the situation we are currently living.”
In practice, the size of the municipal salary bill means that La Linea struggles to find the cash to pay for routine work ranging from painting street markings and replacing street lights to fixing pot holes in the road. Public services and infrastructure deteriorate and this impacts not only on the people who live there, some of whom are Gibraltarians, but also on the people who move through the city, including people who live on the Rock.
“We find it hard to pay for the basic, essential things, and this has a direct repercussion on La Linea´s citizens who are now paying for the wasteful policies of the past,” she says.
“For many years, La Linea has lived beyond its means. Now we´re dragging a deficit and an accumulated debt as a result, and the current situation is serious.”
To tackle the municipal salary bill, La Linea´s town council is working to meet current payments while whittling away the debt as and when it is possible. In parallel, it is also working to reduce costs by removing benefits such as bonuses, expenses and the like. It has also moved to close down municipal companies that do not provide essential services or value for money. The list includes the municipal TV station, which was closed in August with the loss of 22 jobs. Ultimately, it will also mean redundancies to scale back the size of the municipal workforce.
“I know that these are difficult, unpopular measures, but I have accepted that this is a role I have to play,” Mrs Araujo says. “Until those measures are taken, this town council will not be able to recover and move ahead.”
Mrs Araujo uses her own salary to illustrate the cuts that she feels are necessary. Some of the council workers are paid very large salaries, much higher than what Mrs Araujo herself gets paid. The mayor receives an annual gross salary of €53,000, while some civil servants in La Linea are paid close to €100,000 a year.
“If everyone makes a sacrifice that reflects the current circumstances, then maybe we won´t have to lose that many people,” she says. “Salaries that are too high will have to come down, that´s the way it is.”
All of this might seem like a recipe for labour strife but Mrs Araujo has so far largely avoided the conflicts that were bread and butter during the days of Alejandro Sánchez. She has worked to recover dialogue with the unions and to some extent has been successful.
Although the unions protest daily outside her office, the turnout at these demonstrations is low and most workers appear to be biding their time in the hope that she will find a way through the financial tangle. With cutbacks on the horizon, they are also wary of raising their heads too far above the parapet. As such, the protests have become largely symbolic.
“Of course the unions are going to bang the drum if I don´t pay,” she says. “But they are also going to bang the drum if there are cutbacks in the workforce. I´d rather they banged the drum because of the cutbacks, but be able to pay the salaries of the workers every month.”
She does not hesitate to acknowledge that life for many municipal workers has become very hard. Most are surviving on handouts and credit, but many have run out of room to manoeuvre. In extreme cases the town council has had to step in to ensure families have access to essential services including water and electricity.
In that sense, Mrs Araujo says the workers must be praised for hanging in there.
“They have continued to work with absolute professionalism even though they knew that they might not get paid their full salaries at the end of the month,” she says.
Changing Things
In finding new sources of revenue for her city, Mrs Araujo highlighted the need to ensure that there was sufficient land to accommodate any company that wished to set up in La Linea. One of the key aims of a forthcoming review of La Linea´s urban development plan will be to earmark sites for commercial and industrial use.
“That will be one of the priorities,” she said. “We´re not talking of large businesses of the sort that set up in the major sites in Los Barrios or Algeciras, but rather very specific types of business.”
At present, though, this is a hope for the future. She concedes that the plan is not a response to interest from companies.
“We want to do it the other way round,” she said. “Have the land available first, then find the customers.”
Asked why a business would site itself in La Linea, she spoke of the city´s strategically-advantageous geographic location, with easy access to the A7 to Málaga, Gibraltar and to Algeciras.
“I think La Linea is naturally geared to the services industry and I believe that this is where we will find the interest.”
She also highlighted the new marina facilities and planned commercial developments in that area.
“We need to develop and promote those and create the confidence needed for companies to come and set up here,” she says.
Tourism is another area that Mrs Araujo and her team are keen to develop. She wants visitors to stay in the town and not just see it as a place to drive through en route to somewhere else.
“We have a privileged location, with North Africa just 30 minutes away, with Gibraltar a step away, and at the gateway to both the Mediterranean and the Atlantic,” she says.
“And then there is the potential offered by the joint use of the airport.”
Mrs Araujo met with state airport officials last July, shortly after becoming mayor, to unblock the sale of land on which Spain will build its access to Gibraltar’s new air terminal.
The sale of the plot of municipal land had been stalled for nearly three years by the PP Mr Sánchez.
The PP mayor said he was simply trying to get the best price for La Linea’s cash-strapped council, but others accused him of hampering the cross-border project for political ends.
Now, Mrs Araujo is leading the council initiative to untangle that impasse and renew discussions with Aena, the state airport authority that will oversee the project.
“We are concerned that the terminal in Gibraltar is almost complete and ready to be inaugurated in the coming months and we have yet to reach an agreement to release the land that AENA needs,” she says. “We’ve already had a first meeting to see how we could unblock this issue [and] we hope to renew the negotiations with AENA after the summer.”
“We’re going to sit down and try and close an agreement that will guarantee that the plot of land is available.
Gibraltar Cooperation
In all of these projects, Mrs Araujo sees the potential for Gibraltar companies to get involved. In the coming months, she hopes to strengthen her contacts with the Gibraltar Government and with the local business community to explore possible opportunities.
“Any initiative that aims to encourage mutual cooperation between the neighbouring communities is good,” she says.
“If on top of that we can generate employment or offer Gibraltar businesses assistance to set up here, or offer help finding employees, then that is always going to be positive.”
Mrs Araujo believes that many youngsters in La Linea are already well educated and trained but often struggle find jobs in their area of expertise and, as a result, have to settle for something else or move away.
“But I also recognise that many of them have yet to get up to a good standard of English,” she adds.
“One of initiatives will be to help these youngsters to perfect their English to help them find work in Gibraltar and remove that language handicap that can limit their employment opportunities.” She says the town council would look to see whether Gibraltar could play a role in this educational initiative.
She says that dialogue with Gibraltar had flourished under the PSOE government and the tripartite forum, whereas the PP has always opted for a “false patriotism” in order to hamper that cooperation. But she will not be drawn to reflect on the current political climate and the fact that the tripartite talks had all but collapsed as a result of the row over territorial waters.
“My job as mayor is to encourage goodwill and good relations between both communities,” she told B2B.
“Our common history requires this.” “But that does not mean that the Foreign Affairs Ministry in Madrid cannot have a determined position on Gibraltar in matters that are not within my remit.”
Despite her good intentions, Mrs Araujo concedes that there is potential for storm clouds on the horizon. Spain will hold its next general election on November 20
and the polls show that there is strong likelihood of the PP taking over in Madrid. National elections will be followed by regional ones in Andalucia – as this edition went to press, a date had yet to be fixed – and there are signs that the PSOE may for the first time lose its hold on the regional government too.
The PP has already promised a tougher line on Gibraltar if it wins in November. While it insists it is committed to local cooperation with Gibraltar, it prefers a “two flags, three voices” formula that recognises Britain as the sole interlocutor on Gibraltar issues.
“If that situation arises, then it is going to require even more effort from us,” she says. “Our competencies are local and we are going to continue working in that sense whoever is in government.”
She adds that should the PP win the national elections and harden Spain´s position in respect of Gibraltar, then the Gibraltar Government will have to play a critical role to differentiate between national policies imposed by Madrid and local initiatives led by a PSOE town council in La Linea. “It´s going to require a greater effort,” she says.