Two issues at stake

The first issue is the dumping of 70 concrete blocks into the sea. Spain says that the waters around Gibraltar were never ceded to Britain in the Treaty of Utrecht and that therefore they had no right to create the reef which impedes Spanish fishermen from working there.

Before any dialogue can take place between the two countries, Spain wants those blocks removed.

The second is the amount of contraband tobacco that passes across the border into Spain. Spain says that the amount of tobacco imported into Gibraltar is disproportionate with the number of people living there. They claim that most of it is smuggled across the border to be sold in Spain and show figures to highlight the problem. 

Wherever there is a tax difference between two bordering countries, this is bound to be the case.

 

 

The real problem though is described perfectly by El Pais

David Cameron and Mariano Rajoy are more alike than we are willing to acknowledge. They're both weak national leaders, who have no real control policy progress. The two are fed up with the EU. The two have a terrible problem of youth unemployment. The two face a nation-regions, Catalonia and Scotland, they do not want fully integrated into the entities that constitute the United Kingdom and Spain Castilian. The two countries had empires, some dreams die hard and persist in the symbols of the monarchy. Both have big problems with the financing of their games, but Rajoy corruption reaches to convert legislators to political donors in order to buy their silence. Both irritate the United States, which has signed a long term agreement for use of the important naval base in Rota, a few miles from Gibraltar. The two have peculiar colonial enclaves, Ceuta and Melilla in the case of Spain, Gibraltar and the Falklands and in the case of Britain. The two have a disastrous banking systems, whose failure allowed because ministers and officials in London and Madrid were enjoying a permanent nap while the bankers took the world to the great recession growth has been interrupted for five years both in Spain as the UK.