Memorandum from Hon Peter Caruana QC,
Chief Minister of Gibraltar
1. Mr Chairman, the Government and people
of Gibraltar are grateful to the Committee for their continued
interest and concern for Gibraltar. Your reports of June 1999,
July 2000 and April 2001 were well received in Gibraltar, showing
as they did a deep understanding for the true nature of the situations
and issues that Gibraltar faces.
2. In September this year I asked for a further
opportunity to give evidence. Your invitation to do so, today,
could not be more opportune in time. There is widespread (indeed
practically universal) concern, anxiety and anger in Gibraltar
about recent developments.
3. Mr Chairman, if I have time, I would
like to update you on issues that you have been monitoring, eg
the Eurovote, Single Skies, telephones and borders but I feel
compelled, in current circumstances to begin with the recent so-called
impetus given to Anglo/Spanish discussions over Gibraltar following
the re-launch of the Brussels process in July this year. If I
don't have time to cover everything, and if you agree, I will
leave you a written submission on those other, important, issues.
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4. Most of you will be aware that the Government
of Gibraltar, the overwhelming majority of the people and indeed
all political parties in Gibraltar assert our right as a colonial
people to self determination, that is the right to decide our
own future. We will never give up this right, nor participate
in any political process of dialogue the very structure,
and pre-determined objective of which is incompatible with our
right to freely decide our own future.
5. In this connection I think it is important
to place before you a declaration of unity signed on 4 October
2001 by all present and past members of the House of Assembly
and supported by practically the whole adult population at a mass
public demonstration on the same day. The declaration reads as
follows:
"We, the undersigned, being all the elected
Members of the House of Assembly of Gibraltar, declare and endorse
the following propositions, which unite and reflect the views
of the overwhelming majority of the people of Gibraltar.
1. The people of Gibraltar will never, ever,
compromise or give up our inalienable right to self-determination,
that is, the right to decide our future in our land.
2. The people of Gibraltar will never compromise
or give up our sovereignty, not for good relations with anybody
and not for economic benefits either.
3. The people of Gibraltar will not compromise
our right to self-determination, still less sovereignty, in exchange
for respect for rights which are ours anyway, and which others
should be made to respect unconditionally
(a) CALL UPON Her Majesty's Government to
honour, respect and uphold our EU rights by ensuring that we participate
in all EC and EU measures in the same manner and to the same extent
as all other citizens and territories of the European Union and
we condemn Her Majesty's Government in the United Kingdom for
capitulating under pressure to the suspension of Gibraltar from
the EU Single Skies measures, and the Government of the Kingdom
of Spain for demanding it.
(b) REAFFIRM that Gibraltar wants good, neighbourly,
European relations with Spain based on reasonable dialogue and
mutual respect. Spain is obliged to respect our EU and other rights.
(c) ASSERT that Gibraltar belongs to the
people of Gibraltar and is neither Spain's to claim, nor Britain's
to give away.
6. Peter Hain, Minister of State at the
Foreign Office, appears to agree that we enjoy the right to self
determination. In a written answer to a Parliamentary Question
from Mr Crausby he said on 6 November 2001 "However, HMG's
position on this issue has been consistent since the mid 1960s.
We believe that Gibraltar's right to self determination is not
constrained by the Treaty of Utrecht except insofar as Article
X gives Spain the right of refusal, should Britain ever renounce
sovereignty. Thus independence would only be an option with Spanish
consent".
7. In other words, we have the right to
self determination, to decide our own future, except to opt for
independence.
8. Gibraltar does not seek independence,
and therefore we take the view that our decolonisation, through
a process of the modernisation of our constitutional relationship
with the UK, remains an exclusively bilateral matter between UK
and Gibraltar. I expect that the House of Assembly's Constitutional
Select Committee, currently meeting to review this issue, will
be submitting its report to the House of Assembly recommending
specific constitutional modernisation proposals sometime in the
New Year.
9. Even though Gibraltar does not seek independence,
the so-called Spanish first option clause in Article X of the
Treaty of Utrecht is the foundation upon which the whole Spanish
case is built. Yet we firmly believe that that clause is completely
ineffective and invalid today in modern international law. We
have eminent international legal advice to the effect that Article
X in general, and the "first refusal" clause in particular,
are incapable in modern applicable international law to curtail
or otherwise affect our right to self determination, which is
enshrined in primary international law.
10. We have repeatedly called for this point
to be taken to the International Court of Justice for adjudication.
The UK and Spanish Governments refuse to do so. Why? Unfortunately,
we have not yet found a way of getting before the International
Court of Justice ourselves. I would ask you to put to HMG that
it should do so. After all, if there is a risk attached
to that course of action it is only we (and not UK) who are running
it. Of course Spain would run the risk as well.
11. And therefore, it is against this backdrop
of self determination asserted by us as the key to our future
and accepted (bar independence) by HMG that this impetus in Anglo/Spanish
negotiations over Gibraltar takes place, in the context, not of
respect for our right to self determination, but in an attempt
to make a comprehensive agreement that will resolve Spain's sovereignty
claim and, allegedly, deliver to us a more stable, secure and
prosperous future as agreed by UK and Spain.
12. The stated aim of the dialogue is for
the UK and Spain to resolve all their differences over
Gibraltar. As far as Spain is concerned that is, almost exclusively,
sovereignty.
13. Both the UK and Spanish press have recently
been awash with very similar speculation about the nature of such
a deal. This cannot happen spontaneously. Someone is inspiring
the press. Those reports speculate about joint sovereignty, shared
responsibility by UK and Spain for Gibraltar within the EU, a
change to our EU status, a change to our status within the Common
Customs Union, the setting up of joint Anglo/Spanish Committees
that would somehow give Spain a role in our affairs, an airport
agreement, even possible Spanish involvement in the military base.
14. There is no prospect of the people of
Gibraltar accepting a deal that involves the transfer or partial
transfer of sovereignty or sovereign rights to Spain, nor one
that gives Spain a role in our affairs or a presence in Gibraltar
(other than a Consulate as any other foreign country is welcome
to have).
15. At the same time Señor Pique
continues to assert that progress on co-operation must be accompanied
by progress (for Spain) on sovereignty. He continues to assert
that the objective for Spain remains the full integration of Gibraltar
into Spain, even if this takes time and that this objective is
irrenounceable. Therefore, as if the terms of the speculated deal
were not themselves bad enough, it would apparently not even produce
an end to Spanish ambitions.
16. The British Government remains committed
not to transfer sovereignty of Gibraltar, in whole or in part,
contrary to the wishes of the people of Gibraltar. The people
of Gibraltar will not agree to any such transfer. The Foreign
Office well knows this, yet it continues to say that they will
reach a comprehensive agreement by next summer. Indeed they have
shortened the timescale from December 2002 to summer 2002, in
the knowledge that the people of Gibraltar will not (in the promised
referendum) agree to deals of the sort being speculated in the
media and by the results of which referendum HMG has declared
that it will be bound.
17. So what is the purpose of this impetus?
Why the unseeming haste? What comes after the inevitable rejection?
Has that also been agreed? Mr Hain says that if we do not accept
whatever deal HMG strikes we will be "left behind"?
Does this mean a loss of UK support for us in the face of Spain's
infringement of our rights, or for our right to prosper economically
and therefore socially? Does it mean that economic pressure will
be applied, that economic doors will shut? Does it mean that our
participation in the EU, in accordance with our Treaty rights
will be further eroded and disregarded? We do not know.
18. Mr Straw says that the purpose is to
secure a more stable, secure and prosperous future, a better future
for the people of Gibraltar. We already enjoy a good, stable,
secure and prosperous present. Spain says, falsely, that we do
so illicitly? Does Mr Straw therefore mean that unless we agree
to a deal involving the things being speculated in the media,
our current stability, security and prosperity will not persist
into our future? The people of Gibraltar interpret such statements
as veiled threats.
19. This would not be offering the people
of Gibraltar a fair, reasonable and democratic choice in exercise
of our right to self determination, even as HMG understands it
to exist. A serious political miscalculation is being made if
it is thought that the people of Gibraltar will respond, either
to threats and intimidation—or to inducements—by giving
up our British sovereignty or our democratic birthright to freely
decide our own future free of duress.
20. Our right to self determination means
something more than the right to accept, or turn down deals hatched
bilaterally between London and Madrid, and, in the words of Mr
Hain "being left behind" if we turn it down. What sort
of self-determination is that? What sort of free choice is that?
Can we not opt to retain our exclusively British sovereignty and
enjoy our democratic, human and European rights as a people to
develop and prosper economically, socially and politically? If
the answer is no, then our right to self-determination is being
curtailed to a far greater extent than the bar to independence.
If that were so our right to self determination would amount to
no more than the need to barter our sovereignty for respect for
our EU rights on the one hand, or to retain our British
Sovereignty and "be left behind" (whatever that may
mean) on the other. The people of Gibraltar reject both these
choices as a betrayal of their birth-rights and their aspirations
and political rights as a people.
21. This does not mean that we reject dialogue
with Spain. I do not believe, as some do in Gibraltar, that dialogue
with Spain under the Brussels Agreement is incompatible with asserting,
upholding and pursuing our right to self determination. But this
depends, crucially, on the terms of our participation in that
dialogue being right.
22. Those of you who follow Gibraltar politics
know that all the time that I have been involved in Gibraltar
politics I have advocated participation in dialogue with Spain,
even under the Brussels Process. I have testified before this
Committee to that effect.
23. But I have similarly also said repeatedly
that such dialogue has to be safe and compatible with our right
to self determination. We cannot, reasonably, be expected to take
part in dialogue which requires us to forfeit our own position,
our right to self determination and our aspiration as a people,
and to acknowledge and accept the very essence of the Spanish
case over Gibraltar. What does this mean and why is it important
to us?
24. It is necessary to understand the Spanish
position over Gibraltar. Spain is obsessed with the fact that
dialogue about Gibraltar should be strictly bilateral between
the UK and Spain. Why? Because her position in the matter of Gibraltar
is based on the fundamental premise that Gibraltar is Spanish
territory, occupied by the UK, in which the people of Gibraltar
have no political rights, least of all the right to have their
wishes respected or to decide their own future through the exercise
of self determination. Accordingly, Spain maintains Gibraltar
must be decolonised by Britain negotiating the transfer of sovereignty
back to Spain. The political manifestation of this position is
the bilateralism of the dialogue between London and Madrid.
25. And so I am "invited"
to take part in a process of dialogue between the UK and Spain
in which it is said that the future of my country is being
decided. And when I say, well, at least can I be sure that nothing
will emerge from those discussions unless there is agreement between
all the participants ie. that nothing will be agreed above the
Gibraltar Government's head in political dialogue about the future
of Gibraltar. I am told that that is not possible and that my
electorate will have a vote in a referendum.
26. If, as Mr Hain believes to be the case,
Gibraltar enjoys the right to self determination, how can it be
that the Government of Gibraltar is expected to go as an invitee,
merely to be consulted and to express its opinion, to talks about
the future of my country? It is a democratic nonsense.
27. And so, I am expected to lend my support,
through participation, in a process of dialogue from which will
emerge a deal before next summer, over the terms of which I have
no control and which will then be put to the people of my country,
to accept or reject at the peril of "being left behind"
(whatever that might mean). That is simply not a viable or safe
political process of dialogue. Nor does such status at talks in
any way respect or reflect our right to self determination (which
Mr Hain agrees we have, barring independence, which we do not
seek).
28. And if any of you think that this analysis
is excessively melodramatic, let me quote Spanish Government sources
during the last 14 days:
18 November 2001: Unidentified sources
in the Spanish Foreign Ministry quoted (extensively) in the daily
"El Mundo" and reported in Reuters Business Briefing:
"Caruana and his Government remain fixed in their positions,
but they should realise that sooner or later, they will have to
take part in this dialogue in which their future is to be decided.
But Caruana must also clearly understand that he will not be able
to decide the future status of Gibraltar, since this corresponds
only to the two sovereign states who signed the Treaty of Utrecht.
This Treaty, signed in 1713, is the only legal basis for Britain's
presence in Gibraltar, and Spain relies on it to defend its interests,
since the only change in status possible under that Treaty is
the return of the colony to Spain.
29. Caruana appears not to realise that
Spain and UK are the only architects who are going to build the
house and that he will only be able to give an opinion about the
colour of the walls." The source is identified as a senior
Spanish Government spokesman.
30. Mr Chairman, this is the process of
dialogue in which I am invited, as a guest, to participate.
So where is our right to self determination in this process? Unless
we genuinely have our own voice, we shall be completely genuflecting
to this wholly anachronistic and undemocratic approach to the
decision of our future. We will not do that.
31. Having our own voice, as a participant
in such talks, means much more than saying "Caruana has his
own voice in the UK delegation", meaning that he is free
to speak, to contribute—or as the Spanish say, to express
his opinions—but then to be ignored and have a deal struck
over my head. That is not a reasonable or viable political process
of dialogue, nor can any agreement emerge from such a process
that has the remotest prospect of being accepted by the people
of Gibraltar.
32. Mind you, according to Señor
Pique, I am not free even to express my opinion on all issues
affecting Gibraltar, but only on those that are "within my
competence", ie not on the sovereignty issue which he regards
as none of my business. At the joint press conference with Mr
Straw after the Barcelona talks on 20 November Señor Pique
(twice) said:
"We wish to publicly reiterate the convenience,
wish and invitation to Mr Caruana, as Chief Minister of Gibraltar
to incorporate himself in the process. His separate voice within
the British delegation is guaranteed for all those issues which
are within his competence."
"We have offered him a separate voice within
the British delegation so that he can express his opinion on any
matter within his competence."
33. I have even heard reported in the press
that it is open to me to participate on the basis of the "two
flags, three voices" model, which I myself advocate and would
accept. But when, in discussions with the FCO, I try to secure
any practical meaning for that phrase or model it is denied to
me. They appear to think that it is just a phrase. It is a sham.
I am offered the same terms as prevailed in the early 1980s when
there was no question of talks being on the basis of two flags
three voices.
34. And so, Mr Chairman, our participation
in dialogue is only compatible with our right to self determination
if it is open agenda (not pre-determined to transfer sovereignty,
in whole or in part, now or later to Spain) and if we are really
there with our own effective voice. That means that agreements
need to be agreements between the three voices present—that
is the UK, Spanish and Gibraltar Governments. What else could
Mr Hain have meant when he called for my "full participation"
in the process. Surely he could not think that "full participation"
means to be consulted, express your opinion and wait to see what
others (UK and Spain) decide above your head. What sort of political
process of dialogue is that?
35. Two flags three voices does not mean
that the voices only express views, but the flags reach the agreements.
36. That is the process of dialogue
in which I have declined to participate. But I would be delighted
to participate "fully" with my own real, separate voice
(albeit within a single, composite British delegation) in a political
dialogue in which agreements are agreements to which the three
voices and the two flags agree. That is what "two
flags three voices" mean.
37. This has been my political position
for many years. I do not agree that hard work has been done to
secure my presence. Indeed, I believe that very little realistic
effort has been made to secure my participation in any political
reasonable or viable manner.
38. The terms offered to the Gibraltar Government
go nowhere near accommodating the circumstances for participation
to which HMG knows I am publicly committed, and which are necessary
for this dialogue to be safe and dignified for Gibraltar, as I
explained earlier. Indeed the terms offered to me this year are
much worse than the terms offered in 1996 and 1997 and which we
rejected.
39. Yet, in the knowledge that this is so,
HMG is publicly spinning the view that "it doesn't understand
why I am boycotting the talks". The aim, presumably, is to
convey to the general public and Parliament in Britain the feeling
that Gibraltar is the unreasonable party, when the reality is
that the Foreign Office has, once again, caved in to Spanish demands—in
this case Spain's undemocratic obsession with the dialogue having
to be and be seen to be exclusively bilateral between London and
Madrid, in which I am invited to express my views, when relevant.
40. Mr Chairman, I have invested a large
amount of local political capital in my 10 year old policy of
advocating dialogue with Spain. I will continue to do so on terms
that are safe for Gibraltar and not implicitly a betrayal of our
right to self-determination. I will not be discouraged by simplistic
distortions of our position. Attempts can continue to be made
to ridicule and discredit the Gibraltar Government's position
through misrepresentation of it. But the Gibraltar Government's
position enjoys the overwhelming support of the people of Gibraltar
and to discredit it will do nothing to increase Gibraltarian confidence
in the process.
41. Mr Chairman, in your Report of June
1999 you recommended that dialogue should put the issue of sovereignty
on hold, and explore areas of co-operation. That is not the process
of dialogue that is apparently under way. It is a process which
aims, by next summer, to resolve the dispute. That must necessarily
involve disposing of Spain's sovereignty claim, which she still
says is irrenouncable and has to be progressed in parallel to
co-operation.
42. We do not fear dialogue with Spain.
Indeed I openly seek it. No-one in this House should think that
we duck reasonable dialogue with Spain. On the contrary, only
two weeks ago, whilst in Madrid for a TV interview, I had a lengthy
dinner meeting with the most senior official in the Spanish Foreign
Ministry and their two most senior officials involved on the Gibraltar
issue. And so, we do not fear, but we seek, open agenda dialogue
on reasonable terms that do not bow to Spain's view of life at
the expense of ours. The process and structure of dialogue has
to be one that works for all the participants.
43. In the meantime it does nothing to improve
Gibraltarian confidence in the process for Mr Hain to appear on
TV, as he did on Sunday, saying that he cannot understand why
I won't participate in what he called "only dialogue, just
talks". On Sky News on Sunday Peter Hain disingenuously asked,
"Why won't Peter (me) come to talks, what's wrong with having
a dialogue, why doesn't he come and talk with us, all we're asking
is to talk together". The reality is that he has told Parliament
and Gibraltar that a comprehensive deal will be done by next summer
whether we're there or not and if we don't accept it we'll be
"left behind". Those aren't just "exploratory talks".
Mr Chairman, your letter inviting me to give evidence here today
invites me to give evidence "on the latest position with
respect to negotiations over the future of Gibraltar". I
believe that the nature, quality and security of our participation
as a Government in such dialogue has to reflect that fact.
44. The people of Gibraltar want Gibraltar
to remain British. We do not want to be part of Spain or of joint
Spanish sovereignty. We do not want Spain to have a role in our
affairs. We trust that we can continue to rely on your support
in that simple, democratic aspiration. For our part, I assure
you of the Gibraltar Government's continuing willingness and readiness
to take part in any properly structured process of dialogue in
which we are given a proper status, that reflects the fact that
we are the democratically elected Government of a country comprising
30,000 British, European Community citizens who are said by HMG
to enjoy the right to self determination (bar independence). That
means more than the right to say no in a referendum to deals hatched
by others.
The Eurovote
45. No proposals have yet been put to the
Gibraltar Government as to the manner and timing of the enfranchisement.
Meetings between the two Governments are being arranged at which,
hopefully, this will be done. It is, needless to say, important
for us to participate in the next Euro-elections, on the basis
of the enfranchisement of both the people and the territory of
Gibraltar, and within Britain's (as opposed to any other country's)
electoral process. We would very much welcome the Committee's
continued interest and support in ensuring that acceptable details
and arrangements are in place in good time to enable us to participate
in the next elections. In answer to a Parliamentary Question on
30 October this year, FCO, Minister of State, Mr Peter Hain said
that it is important that the Court judgement giving the Gibraltarians
the right to vote in the next European elections is honoured and
implemented, and that HMG intends to do so. "with Spain's
agreement as well". It is not clear what this last reference
means. Spain's agreement would only be required, in common with
all other EU Member States, to a formal amendment to the EC Voting
Treaty. It is not required for unilateral legislative action on
the UK's part. It is not clear whether this is one of the issues
that is being mooted as part of the comprehensive agreement that
the FCO is seeking to strike with Spain before next summer. However,
it is important that delivery of compliance with our adjudicated
human rights should not be presented as an act of political generosity
by Spain towards Gibraltar or as part of some deal.
Single Skies
46. In 1987, the then British Government
agreed to the suspension of Gibraltar from a package of EU open
skies directives (now regulations) unless and until the Gibraltar
Government chose to implement the arrangements in the 1987 Airport
Agreement. The EU measures in question (from which we were so
suspended under that Agreement) were limited to measures liberalising
the provision of air services between Member States, so called
"access" measures.
47. In November 1999 the Gibraltar Government
wrote to the FCO pointing out (in the context of the EC Community's
proposed accession to the Eurocontrol International Convention
relating to co-operation for the Safety of Air Navigation) that
it was important that Spain not be allowed to succeed in her likely
attempts to make sovereignty gains over Gibraltar's airspace or
to exclude or suspend Gibraltar from any measures or arrangements
covered by accession to the Eurocontrol Convention.
48. In December 1999 the FCO wrote to the
Government of Gibraltar stating that: "With regard to negotiations
on the EC's accession to Eurocontrol, the UK made clear at the
Working Group on 18 November that we would not accept a clause
suspending the application of the EC's accession to Gibraltar".
49. Close contact was maintained by GOG
with the FCO thereafter to ensure that Gibraltar was not again
sacrificed on this issue.
50. In September 2001 the UK Government
agreed to Gibraltar's suspension from the EC Single Skies package
of measures and also from a proposed EU Regulation on Aviation
Security.
51. The UK Government's policy had been
said to be that it would not accept Gibraltar's systematic exclusion
or suspension from EC Aviation measures. Having agreed to suspend
us from a Regulation providing for Aviation Security it
is difficult to imagine what aviation measure HMG would not now
systematically agree to exclude us from. These measure are not
covered by the infamous 1987 Agreement because they are not "access"
measures—they relate to things that must happen in
Gibraltar airport.
52. The Minister of State, Mr Hain appears
to believe that there is a great distinction to be drawn between
exclusion and suspension. We do not see the practical difference
when the requirements for lifting that suspension are known to
be unacceptable to the people of Gibraltar, ie implementation
of the unworkable and obsolete 1987 Airport Agreement. He also
asserts that this suspension is unimportant in practice because
Gibraltar can adopt the same security regulations, in parallel
with the EU, but as a matter of voluntary domestic legislation,
ie we can adopt the same safety regime. With the greatest respect
to him this misses the essential political issues and principles
at stake.
53. We are committed to mounting whatever
legal challenge to these further suspensions we may be advised
is open to us.
Telephones
54. Hon members will recall that there are
three distinct aspects to the telephone issue, all of which result
from Spain's refusal to recognise our "350" direct dial
code. Those aspects are (1) insufficiency of Gibraltar telephone
numbers accessible from Spain; (2) Spain's refusal to allow Spanish
mobile phone operators to sign agreements that will allow our
mobile phones to work in Spain, as they do all over Europe; and
(3) the failure of international calls to reach Gibraltar if dialled
"350" and channelled via Spain.
55. Gibraltar's two telephone companies
have five year old complaints pending at the European Commission.
No action has been taken to address them in accordance with the
legal rights and obligations of the parties under EU law.
56. Instead, and contrary to the Gibraltar
Government's repeated requests, the matter now emerges in the
bilateral Anglo-Spanish political talks.
57. Within that political process
of dialogue, Spain has offered, effectively, an extra 50,000 useable
numbers, which according to Señor Pique, is Spain's
assessment of Gibraltar's need. In offering these numbers Señor
Pique spoke of not allowing Gibraltar sufficient numbers to engage
in what he calls "disloyal competition with Spain".
He openly declares that numbers must be rationed to prevent Gibraltar
from competing with Spain's own telephone industry. He also says
that they should not be used to develop our allegedly opaque finance
centre.
58. And finally, Señor Pique has
made clear that he offers these numbers in the context of a political
process in which he says that there must be parallel progress
for Spain on its sovereignty claim.
59. In a nutshell the position, in which
we have been placed is this:—
1. Gibraltar's legal rights in this matter
appear to be unenforceable and unjustifiable.
2. Instead, Spain rations us numbers in accordance
with her assessments of our needs and her desire to protect
herself from competition and to constrain our economic development—and
this in a political process in which she wants to be paid with
sovereignty.
3. The UK press now presents this situation
as "generosity" on Spain's part. In other words the
results of a flagrant and persistent breach of Gibraltar's EU
rights, coupled with gross dereliction of their protection, ends
up (five years later) as political leverage against us
in negotiating about our sovereignty and our future.
4. No offer has been made in respect of the
"350" recognition, mobile phones or lost calls issues.
60. And all of this despite frequent, repeated
and advance warning by us to the FCO, coupled with pleas in advance,
that we should not be placed in this very position.
Border
61. There has been no positive change in
the border regime since last I provided evidence to the Committee.
Delays of around one hour are still the norm, with greater delays
still frequent, caused by a manipulation of procedures at the
border, and lack of resources, to cause the desired degree of
delay. The only change is negative. When queuing to enter
Gibraltar from Spain, vehicles are now required to weave their
way through a serpentine, maze or labyrinth like track more suitable
to a children's fairground or amusement park. It is simply humiliating.
State Aids
62. The Committee may be aware that the
EC Commission has initiated a formal investigation under State
Aid Rules against those aspects of our tax laws upon which our
finance centre is based. The finance centre is an essential part
of our economy. What is more, the Commission chose the more aggressive
of the two procedures open to it, ie the unnotified illegal aid
procedure, which requires the immediate suspension of the legislation
even before the Commission's investigation takes place. The alternative
(existing aid) procedure would have enabled us to maintain the
status quo and thus avoid disruption pending the outcome of the
Commission's enquiry as to whether the legislation does or not
breach State Aid Rules.
63. The Gibraltar Government has brought
a legal action against the EU Commission about its choice by procedure,
and sought HMG's intervention in the court action in our support.
We regret that HMG declined, despite the strength of the legal
advice available to do so.
64. Members of the Committee may be as surprised
as we were, that the very same EC Commission Directorate General
(Mr Monti's Competition Directorate) that has sat inactive on
its hands in the case of Gibraltar's telecom complaints, has so
quickly and aggressively sprung into action against us on State
Aids.
65. On 1 October 2001 I wrote to Mr Romano
Prodi, President of the EC Commission, making, amongst others,
this very point. I have not yet received a reply. Hearing an FCO
Minister discredit the simple aspiration to have our EU rights
and Spain's EU obligations enforced, as "a blunderbuss approach"
and equivalent to proposing "a fortress Gibraltar" will
do little to encourage the EC Commission to take action.
Hon Peter Caruana QC
Government of Gibraltar
28 November 2001
1 See Evidence, pp 1-7. Back
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