Expectations were muted as the date approached of the first meeting between Sir Geoffrey Howe and Francisco Fernández Ordónez to discuss the question of the future sovereignty of Gibraltar. Madrid's hopes were no doubt higher than those of London; whereas the former wanted a clear statement of the British position, the latter wanted to create a climate of confidence for the future.

It was seen as a difficult time for both governments. Madrid was under pressure because it had yet to hold the promised referendum on Spain's continuing membership of NATO. Britain's refusal to hold talks on the Falklands/Malvinas had been opposed at the UN (through a resolution supported by Spain) and the British Government was also coping with the aftermath of the signing of the Anglo- Irish agreement. It was not the time for the British Government to be seen to be making any concessions to Spain over Gibraltar. For this reason, rather than spend the talks exclusively exploring the question of sovereignty it was expected that Britain would prefer to discuss three areas in relation to the Gibraltar issue: first, to review the situation since the full opening of the border; second, to examine progress in the technical talks on air and sea communications and other areas of cooperation; and third, the question of sovereignty. In addition, the issue of pensions for former Spanish workers would have to be aired.

Sir Geoffrey arrived in Madrid on 5 December 1985 for two days of talks. On the first morning Gibraltar was the subject of editorials in both El País and The Times, a sure indication that this was seen as one of those historic moments in Anglo-Spanish diplomatic relations.