GIBRALTAR (AP) -- The European Commission said Monday it hopes Britain and Spain will be able to resolve their latest dispute over Gibraltar by themselves, but warned that Spanish threats to impose a border tax would be illegal.
European Commission spokesman Olivier Bailly said the entry tax suggested by Spanish Foreign Minister Jose Manuel Garcia Margallo was not official but that "any tax or fees imposed at the border of a member state will be illegal under EU law. Illegal. Not in line with EU law."
Commission President Jose Manuel Barroso discussed the spat with Spanish Prime Minister Mariano Rajoy by telephone Monday and agreed that a commission fact finding mission should go to the Gibraltar border area as soon as possible and examine the border control and movement of people and goods questions, the commission said in a statement.
Barroso expressed hope that Spain and Britain would address the issues in line with their EU membership.
Last week, Barroso talked with British Prime Minister David Cameron.
The row stems from Gibraltar's construction of an artificial reef, which Spain says affects its fishermen. In apparent retaliation, Spanish police enforced border control checks on cars entering Gibraltar, creating massive tailbacks.
The dispute has led to a sudden souring in diplomatic relations. Spain says it will take all legal measures to defend its interests, while Britain pledges to stand by Gibraltar.
On Monday, a British Royal Navy warship arrived in Gibraltar for what Britain's government said was a planned naval exercise in the Mediterranean.
Spain ceded sovereignty of Gibraltar to Britain in the Treaty of Utrecht in 1713, but has persistently sought its return.
The fishermen claim the reef of around 70 concrete blocks - some with steel rods protruding - could snare and damage their nets and have stopped fishing there.
Rajoy has defended the border controls, saying they are needed to combat drug and tobacco smuggling, adding that the checks are in line with security policies employed by member countries of the Schengen free travel zone. Britain and Gibraltar are not part of the Schengen agreement.
Besides floating the idea of charging people entering and leaving Gibraltar 50 euros ($66) to provide compensation for the losses that the fishermen face, Margallo has also talked of investigating Gibraltarians living in Spain for possible financial fraud.
Gibraltar's chief minister, Fabian Picardo, said the reef protects fish stocks from being over-exploited. He said Sunday that that "hell will freeze over" before Gibraltar removes the reef, and he has accused Spain of behaving like North Korea.
Gibraltar has accused Rajoy of using the reef dispute to deflect domestic attention away from Spain's severe economic crisis and allegations of corruption involving his ruling Popular Party.
Associated Press writer Juergen Baetz contributed to this report from Brussels. Giles contributed from Madrid.