Gibraltar, a self-governing British territory at the southernmost tip of the Iberian peninsula, is home to only about 40,000 people but relies on some 15,500 workers who cross from Spain every day.
The lifting of border controls between Spain and Gibraltar has closed "an open wound," Spanish Prime Minister Pedro Sánchez said on Wednesday as an agreement allowing free movement across the frontier came into force.
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Speaking at a ceremony marking the removal of the metal gates separating the Spanish town of La Línea de la Concepción from the tiny British territory, Sánchez said the end of routine border checks marked a historic moment.
"For decades, the border fence was exactly that, an open wound for the thousands of workers who crossed every day," the Socialist leader said.
"Today, we are making history, good history, because today, the last wall in continental Europe falls," he added, saying the agreement opened the doors to a "new era" of shared prosperity for the region.
The ceremony, attended by Gibraltar Chief Minister Fabian Picardo, took place after the end of border checks between Spain and the territory came into effect at midnight.
Gibraltar, a self-governing British territory at the southernmost tip of the Iberian peninsula, is home to only about 40,000 people but relies on some 15,500 workers who cross from Spain every day.
During rush hours, long lines often formed at the land border as documents are checked, especially during periods of tension between Britain and Spain, which claims sovereignty over the territory, known as "The Rock."
But under an agreement reached between Brussels and London following Britain's exit from the European Union in 2020, border controls have now been eliminated.
The deal was signed in Brussels on Tuesday.
EU trade chief Maroš Šefčovič took part in the signing ceremony alongside British and Spanish ministers as well as Gibraltar's Picardo.
In a radio interview beforehand, Spanish Foreign Minister José Manuel Albares said the agreement "opens a new era" for Gibraltar and the adjoining region of Spain, that will create "enormous opportunities."
'Very positive'
A smoother border will make it easier for Gibraltar businesses to recruit and retain workers who live in Spain, as the "hassle" of crossing the frontier can be "significant," said Owen Smith, head of the Gibraltar Federation of Small Businesses.
"It's been a big factor in retention and certainly a fluid border is going to make life much easier," he told AFP, calling it "very, very positive."
The agreement will align Gibraltar with the rules of Europe's passport-free Schengen travel area.
It was reached after years of talks between Spain, Britain and the EU.
Travellers arriving from outside the Schengen zone will still have to show their passports to officials at Gibraltar's airport and port.
Spanish Prime Minister Pedro Sánchez is set to visit the frontier zone on Wednesday, where workers have in recent weeks taken down the old chain-link fencing separating the two sides.
He has hailed the new arrangements as bringing down "the last wall" inside the EU, saying they would create a zone of shared prosperity.
Picardo has described the agreement as removing "the physical barriers of a bygone era of friction" while keeping "the keys to our own front door."
Sword of Damocles
The border was closed by Spanish dictator Francisco Franco in 1969 after Gibraltar, which relies on London for defence and foreign policy, voted overwhelmingly in a referendum to remain British.
The closure, which lasted 13 years, cut off the daily movement of workers from Spain into Gibraltar and separated families.
Since then, long queues have repeatedly formed at the Gibraltar-Spain border when diplomatic tensions over the territory's sovereignty have led to tighter controls by Spain.
"It is important that this sword of Damocles disappears," said Manuel Triano Paulete, secretary general of the CCOO trade union in Spain's Campo de Gibraltar region which surrounds the British territory, saying cross-border workers often did not know how long it would take them to get to work.
With an economy based on financial services and online gaming, Gibraltar, which covers just under seven square kilometres, has one of the highest per capita incomes in the world.
It has long been a lifeline for people who live in Campo de Gibraltar, which has historically had one of Spain's highest jobless rates.
London and Madrid have disputed control of Gibraltar since the tiny territory was ceded to Britain in the 1713 Treaty of Utrecht.