
Spain has taken a step back with import restrictions on Argentina’s bio-diesel applied in a reprisal move after Argentine president Cristina Fernandez decided to seize control of energy company YPF, subsidiary of Spanish Repsol, earlier this year.

As tension with Spain escalates the British Government made clear that it would take “all necessary and proportionate” measures to maintain the integrity British sovereignty of Gibraltar and its waters. Europe Minister David Lidington set out the position in a letter to the Governor, Sir Adrian Johns, in response to the petition organised by the Defenders of Gibraltar.

Banking giant Santander said on Monday that it will absorb two of its Spanish offshoots, closing 700 branches in the latest stage of Spain's great banking shake-up. The biggest bank in the Euro zone by market value, said it could save 520 million Euros a year by absorbing the offshoots, Banesto and Banif.

A Royal Navy warship used a routine logistical visit to Gibraltar on Wednesday to patrol British waters around the Rock. The highly unusual move came a day after an incursion by a Spanish Navy vessel and against the background of diplomatic tension between the UK and Spain over the waters row.

The British Government reaffirmed its commitment to trilateral dialogue, despite claims from Spain that London and Madrid would discuss the waters row on bilateral terms leaving Gibraltar aside. A spokesman for the Foreign & Commonwealth Office said trilateral dialogue was the only acceptable mechanism for “formal” talks about Gibraltar.

A Spanish warship made a two-hour incursion into Gibraltar waters on Monday evening, in a defiant response to Britain’s warnings to stay away. The incursion came just hours after the British Foreign Secretary, William Hague, told the House of Commons that Britain would take “a grave view” of any violation of British sovereignty in Gibraltar waters.

The British Government said on Thursday that “no options should be ruled out” in defending the British sovereignty of Gibraltar’s territorial waters, reports the Gibraltar Chronicle.

Argentina has filed complaints with the World Trade Organization against the United States over limits on beef and lemon shipments, and against the European Union and Spain for curbs on bio-diesel, Foreign Minister Hector Timerman announced.

Gibraltar Chief Minister, Fabian Picardo held a meeting on Monday with UK Minister for Europe David Lidington in which they discussed their concerns over Spain’s purporting to pass legislation banning land reclamation and the offshore storage of fuel in Gibraltar waters.

Spain's jobless grew to a new record in November, official data showed Tuesday. The number of people registered as unemployed grew by 74.296 or 1.5% to 4.91 million in November from the previous month, the Labour Ministry said on Tuesday.