It was drafted before Britain and Gibraltar entered the European Union and, indeed, before Spain herself acceded. Imprudent and inflammatory comments from Madrid would not be helpful now.The key to success lies in recognising that the current constitution of Gibraltar, set out in the Gibraltar Act 1969, is entirely unserviceable for modern Gibraltar. Any British minister with responsibility for the colony dreads waking up one morning and reading something ghastly about Gibraltar on the front pages of every newspaper.The election of Peter Caruana does provide an opportunity. The first thing that has to happen is that both Spain and Britain must keep quiet for a short period while the new Chief Minister finds his feet.

It is farcical that two grown up countries like Spain and Britain, with a combined population of nearly 100 million, should be in a state of permanent mutual suspicion over the fate of 26,000 people whose principle fault, it seems, is to have been of some service to both nations in the course of their imperial history. It is a potential tragedy because the Gibraltarians themselves, increasingly frustrated by the cul-de-sac in which they find themselves, have not, I confess, always acted with wisdom in the past Nor has Spain. Ernest still thinks that eventually his version of events will triumph. And who knows? Less believable marketing campaigns than this one have come to succeed.. The election yesterday of Peter Caruana as new Chief Minister of Gibraltar may prove to be a watershed. The current position in Gibraltar is unsatisfactory for Britain, for Spain and, most importantly, for Gibraltar itself It is at best a farce and at worst a potential tragedy. The small cluster of Jewish financiers eventually convicted over Guinness were only the tiny tip of the iceberg of culpability. What Mr Saunders and others caught up in the Guinness affair did was never common practice in the City, but before Guinness it was reasonable to believe you would get away with it.