Brexit Rocks Gibraltar as Spain Issues Ultimatum

"We do not see Britain leaving the European Union has an opportunity but you have to understand that if Brexit happened it would change our obligations to Gibraltar," a source told London newspaper The Times.

British MPs have been warned that the UK must factor Gibraltar in the event of a Brexit from the European Union. Gibraltar's government recently sent a six-page document to the chairman of the UK's Foreign Affairs Committee outlining its concerns about the impact a Brexit would have on the Rock.

"In the event of a vote to leave the European Union, it is imperative that the United Kingdom's negotiation of a new relationship with the EU, from outside it, takes into account the views of the Government of Gibraltar," the briefing paper states.

Gibraltar wants the UK and Gibraltar to remain in the EU amid concerns that Spain could exploit the situation and forgo its obligations to the peninsula. The Rock needs Spain for access overland to Europe where around 10,000 people cross the border every day for work.

Gibraltar has been part of Britain's territory since 1713 — but Spain considers the Rock to be Spanish territory and wants it back and territorial tensions have escalated in the past few years.

In 2013, Spain complained about an artificial reef laid around the Rock by the British colony, claiming it would damage the country's fishing industry. Madrid retaliated by imposing border checks on every traveler in and out of Gibraltar causing debilitating delays on roads. Britain's response was to send a Royal Navy ship, HMS Westminster to dock in Gibraltar.

Prime Minister David Cameron said the border checks were politically motivated and said that it violated the European Union's principle of free movement. A principle Cameron has since been keen to distance the UK from during Britain's renegotiation of its membership with the EU. However the European Commission ruled that the border controls were lawful.

According to the Spanish source who spoke to the Times, a Brexit would mean: "No longer would we have to respect the free movement of labor not having long queues and the free movement of capital and goods which Brussels demands.

"We could even close the border if we wanted."

In the recent briefing notes sent to MPs by the Gibraltar government, includes the concern that if Gibraltar was not in the EU, "Spain would be significantly more reluctant to cooperate with its authorities."

The notes sent to MP Crispin Blunt, chairman of the UK's Foreign Affairs Committee state:

"The threat from Spain to Gibraltar's democratic, political and economic well-being remains real."