Sir Graham Watson, a Liberal Democrat MEP for the South West of England and Gibraltar, said he has written to the president of the EU Commission, Jose Manuel Barroso, to complain about the treatment his constituents are receiving.
The MEP has asked for European monitors to be sent to the border:
I am deeply concerned by Sr Margallo's latest comments, which follow months of harassment of my constituents by the Spanish government.
The people of Gibraltar are as much EU citizens as those of Spain. As such, they have the clear legal right not to be discriminated against on the basis of where they are from; nor should their freedom of movement be restricted.
I have raised concerns about Spanish harassment with various European Commissioners in recent months, in many cases in the presence of Ministers from the Government of Gibraltar. I have asked the Commission to send observers to monitor the situation at the frontier.
It may be a pre-planned training exercise but what timing: UK warships sail through disputed water to Her Majesty's naval base on Gibraltar.
Spain could damage to the economy in Gibraltar, but in doing so it would harm its own, so a further escalation of threats is unlikely.
The PM has said he is seriously concerned by Spain's plans to introduce a levy at the border with Gibraltar.