"If there is no deal, it's obvious that what will happen is that the European Council will most likely not take place," Sanchez told a news conference in Havana as quoted by Reuters.
“There are still not enough guarantees and Spain is, therefore, keeping its veto on the Brexit agreement,” Sanchez stressed.
Spanish secretary of state for the European Union, Luis Marco Aguiriano, said earlier on Friday that Pedro Sanchez and UK’s Theresa May tried to work out their differences on the tiny peninsula on the tip of Spain in a Thursday night phone call, but their positions "remain far away."
The EU 27 leaders are expected to endorse the draft Brexit deal, including the withdrawal agreement and the declaration on the future EU-UK relations, on Sunday.
Gibraltar, located on the southern coast of Spain, has been a British Overseas Territory since 1713, when Spain ceded it to the United Kingdom under Utrecht Treaty. The region’s residents rejected the idea of Spanish sovereignty in 1967 and joint UK-Spanish authority in 2002.
Gibraltar's Chief Minister Fabian Picardo told the BBC broadcaster earlier on Friday that the territory had shown that it was willing to directly engage in talks with Spain, so it was not necessary to add a special article on this to the Brexit agreement.