(In 10th paragraph, corrects to "disputed" from "shared"
waters; in 23rd, clarifies that flights are from Madrid; in
35th, removes smuggling figure that may be inaccurate; in last
paragraph, corrects Araujo's party to Socialist, not People's
By Fiona Ortiz
GIBRALTAR Aug 18 The people of tiny Gibraltar -
a wealthy British enclave perched on a rocky outcrop near
Spain's southern tip - have a tradition of griping about their
big neighbour, which claims the territory as its own.
But the tetchy relationship has taken a sharp nosedive as an
escalating spat over fishing has interrupted a decade of
relative calm, igniting concerns that Gibraltar's tourism and
port industries could be hurt.
From Spanish Foreign Minister Jose Manuel Garcia-Margallo's
claim that "the party was over" for Gibraltar, to the enclave's
Chief Minister Fabian Picardo comparing Spain's government to
totalitarian North Korea, the rhetoric has turned ugly.
"I cannot remember anything quite so tense and language
quite so vitriolic," said Bruno Callaghan, owner of Callaghan
Insurance company in Gibraltar.
"They've set the clock back 50 years. Whatever happens now,
the mistrust is there."
For Gibraltarians and the thousands of Spaniards that stream
onto the British outpost every day for work, many of them to
build new homes for this overflowing town of 30,000 people,
there is a lot at stake.
It has seen its economy grow steadily since the 1990s,
fuelled by online gambling operations and investment funds drawn
to the low 10 percent tax on corporate earnings.
Across the border in southern Spain, many city halls are
broke and battling joblessness as high as 40 percent. In
contrast, Gibraltar has 3 percent unemployment, a budget
surplus, and pays tuition for every youngster that gets accepted
to a university in the United Kingdom.
Though Britain maintains a military base in Gibraltar, the
territory is self sufficient. One in 10 vehicles in Britain are
insured by Gibraltar firms, ships line up to fuel at its port,
and 11 million tourists last year enjoyed its balmy weather,
rare monkeys and hyper-British pubs festooned with Union Jacks.
Stand-offs with Spain in recent years have erupted over the
handful of small commercial fishing boats from the neighbouring
Spanish town of La Linea, which regularly cross into disputed
waters that Gibraltar claims it has the right to manage.
Then in July, Gibraltar dumped concrete blocks into a
shallow part of the bay to form an artificial reef. About 30
Spanish fishing boats were circling in protest on
Spain, despite having built similar reefs along its own
coastline to renew fisheries, said it was an environmental
disaster, and retaliated by implementing a sporadic "go slow"
policy at the narrow border crossing, occasionally causing
hours-long waits for tourists, workers and shoppers while agents
meticulously searched cars for contraband.
Britain, which handles foreign relations and defence for the
self-governing territory, is now demanding the European
Commission urgently send a team of monitors to see whether the
controls break European Union law.
Spain says it will sue Gibraltarian authorities for
environmental damage from the reef and has threatened to impose
a 50 euro border fee on tourists, restrict air space or block
the enclave's lucrative ship-fuelling business.
The diplomatic row has unluckily coincided with Monday's
scheduled arrival in Gibraltar of British warships on their way
to practice manoeuvres in the Mediterranean, leading
right-leaning Spanish media to accuse Britain of military
Spanish pride over Gibraltar has in the past been ruffled
over far less. British royals now avoid visiting after Prince
Charles and Princess Diana upset Madrid by spending part of
their honeymoon on "The Rock".
When Gibraltar was admitted in May into the Union of
European Football Associations, or UEFA, it was on condition
that Spain and Gibraltar not directly play each other.
"It's astonishing that this type of measure has been taken
that is usually reserved for cases of military tension," said
Dennis Beiso, the Gibraltar team's liaison to UEFA.
The last shot fired over Gibraltar was more than 300 years
ago when Spain ceded the territory to Britain in the Treaty of
Utrecht, a document written in Latin that has proven tough to
interpret on issues such as airspace and that has unenforced
conditions such as that the British expel Jews from Gibraltar.
Gibraltar's Picardo says Margallo's rhetoric is comparable
to the regime of Spanish dictator Francisco Franco, who shut the
border in 1969. It was not completely reopened until 1985.
"We are in a new space where Spain has given herself no room
for dialogue," Picardo told Reuters.
Britain has also alarmed Gibraltar in the past, especially
when former Prime Minister Tony Blair's government in 2001 said
it was willing to share sovereignty with Spain. Gibraltar held a
referendum, in which 99 percent of residents said they wanted to
remain British, a desire Britain now pledges to respect.
The Spanish Socialist government of 2004-2011 took a softer
stance on Gibraltar, for example allowing flights from Madrid to
land at Gibraltar's airport for the first time. Gibraltar is so
small that the airport's runway is crossed by a major road, on
which traffic stops several times a day to let planes land.
But the election of the centre-right People's Party in Spain
in late 2011, as well as the election of a harder line leader in
Gibraltar around the same time set up an inevitable clash.
"Gibraltar does things to provoke Spanish pride, and Spanish
officials react from the gut," said Julian Santamaria, a
political scientist and former Spanish ambassador to Washington.
Political analysts and Spanish opposition leaders say Prime
Minister Mariano Rajoy is stirring up trouble with Gibraltar to
distract Spaniards from a major corruption scandal that has
battered his People's Party.
Conservative British premier David Cameron has also talked
tough on Gibraltar at a time when traditional voters on the
right of his party are being lured away by the anti-European
United Kingdom Independence Party (UKIP).
TWEETING BY THE BAY
Meanwhile, Gibraltarians are getting active.
Former boxer Kaelan Joyce, 30, has hundreds of followers on
Twitter, where he regularly posts complaints about what he says
are illegal fishing activities by Spanish boats.
A recreational fisherman who often takes his 19-foot boat
out into the bay, he said he was frustrated that Gibraltar
police warnings to the fishermen came to nothing.
"I'm trying to spread awareness. You have the Spanish
government putting out anti-Gibraltar propaganda; they have much
bigger means than Gibraltar," said Joyce, who has a Spanish
Gareth Gingell, 26, who also has a Spanish grandmother, is
also lobbying for the local cause. His non-profit organisation,
Defenders of Gibraltar, leaflets tourists queuing at the border,
urging them to lodge complaints with the European Union.
"People were afraid to speak out before, but we have to
highlight what's wrong. We can't be afraid," said Gingell, in a
cafe in the town's Casements Square, teeming with British and
Spanish tourists buying souvenir tea towels, eating fish and
chips and shopping for duty-free perfume and alcohol.
MILLIONS OF CHEAP SMOKES
Spain, meanwhile, complains that Gibraltar is soft on
money-laundering, contraband and tax evasion. All issues that
Gibraltar insists it has cleaned up.
Spain claims Gibraltar imports volumes of cigarettes out of
proportion with its consumption every year. Gibraltar has no
sales tax, so cigarettes cost 60 percent of what they cost in
Just inside Gibraltar, within sight of Spanish customs
agents, stands a small kiosk where a harried sales clerk sells
cigarette cartons to a perpetual line of customers, many of whom
stop there every day.
They tear open the cartons and distribute cigarette packs
into their pockets, handbags and shopping bags, in an effort to
get around the four-pack limit for Spaniards.
"We all have to eat," said one woman who did not want to be
named, hiding cigarettes in her baby carriage before she walked
over the border to Spain. Each carton represents a profit of 2
euros on the other side of the border for smugglers.
Authorities in local towns are dismayed at the hard line
from Madrid. The local shops depend on shoppers from Gibraltar
and the local tour operators take Spanish tourists into the
"Any confrontational atmosphere ... immediately means people
(from Gibraltar) don't want to cross the border and invest in
Spain or do their shopping here," said Gemma Araujo, mayor of
neighbouring La Linea, who is from the Socialist Party.
(Additional reporting by Anna Claeys in Madrid, Peter Griffiths
in London and Dominique Searle in Gibraltar; Editing by Sarah
White and Will Waterman)