Brussels to send observers to Gibraltar as dispute widens

Brussels is to act as a mediator in the ongoing diplomatic conflict between Spain, the UK and Gibraltar, it has been decided.

British Prime Minister David Cameron had previously asked that a delegation be sent and on Monday, Mariano Rajoy and European Commission President José Manuel Durão Barroso discussed expanding the remit of the envoys during a telephone conversation.

Cameron had requested that the technical commission be tasked with overseeing border checks, which Spain has stepped up as the standoff over fishing rights plays out in the waters off the Rock.

Now, Rajoy has asked that the remit of the observers be extended to cover all activity in the British outpost to “verify that economic activity in Gibraltar does not contravene any European law governing money laundering, contraband and taxation,” according to a government press release.

The reference to “assets,” Spanish government sources said, will include the movement of capital in Gibraltar

A statement released later by Brussels stated that both leaders “agree that a mission must be sent by the Commission as soon as possible to examine in situ all questions related to the movement of people and assets on the frontier.” The reference to “assets,” Spanish government sources said, will include the movement of capital in Gibraltar.

It has not yet been decided when the observers will be sent to Gibraltar, but it is expected that it will not be before mid-September, despite Cameron asking for it to be brought forward to arrive in August.

Spain has already lodged a complaint on environmental grounds over Gibraltar’s decision to sink a series of steel and concrete blocks in the Bay of Algeciras to prevent Spanish fishermen from trawling there. The government has also filed a challenge to Gibraltar’s tax laws, which was upheld by the EU. However, the British territory modified its tax model and a second complaint by Spain has still yet to be resolved.

“The Commission hopes that the two member states talk to each other as members of the European Union. Also, it behooves them to find a solution and to overcome obstacles,” said Commission spokesman Olivier Bailly. Spain, though, feels that the EU should rule on the fishing situation.

The Spanish government will defend “the interests of Spain and Spaniards within the legal framework of Spain and Europe,” Rajoy told Barroso.

Meanwhile, Foreign Minister José Manuel García-Margallo’s suggestion to introduce a 50-euro “congestion charge” on the border was scotched by Brussels, which said any such move would contravene EU law. Although La Moncloa said Rajoy and Cameron had not discussed the measure, Brussels said its veto was purely theoretical as no formal request had been made by Spain. The idea is being studied by the Foreign Ministry and the Attorney General’s Office on the basis of the EU legislation introduced when London created a congestion charge in 2003.

On Monday morning, the British frigate HMS Westminster arrived in Gibraltar as part of a long-planned deployment.