Conservative MEPs reacted angrily today to moves by Spain to block an ambitious Europe-wide aviation agreement...unless Gibraltar is excluded.

Madrid is threatening to scupper the so-called Single European Sky initiative because of its long-running argument with Britain over the sovereignty of The Rock and its airport.

The EU Council of transport ministers agreed yesterday to press ahead with Single Sky, which has been on the drawing board since 2004 and would merge national air corridors to create shorter flight paths and cut costs and carbon dioxide emissions.

The Council did not take any position, however, on whether Gibraltar Airport should be included. Spain's transport minister of public works complained that the airport, situated on the narrow strip of land linking Gibraltar to Spain,  was "an area which is being illegally occupied by the United Kingdom".

The inclusion or otherwise of Gibraltar will now be decided in further negotiations between the EU Commission and European Parliament.

Ashley Fox and Julie Girling, Conservative MEPs for the South West and Gibraltar, condemned the Spanish demands as "bullying and posturing".

Mr Fox said: "Spain's stance is provocative and unreasonable as well as illogical and illegal. It flies in the face of the 2006 Cordoba agreement, whereby Spain agreed to stop seeking the exclusion of Gibraltar airport from EU aviation measures.

"Madrid is bullying and posturing while breaking its promises. We will not be party to any agreement that excludes Gibraltar's airport.  Gibraltar is British as well as part of the EU. No amount of sulking will change that.

Mrs Girling said:  “Single Sky is supposed to help not hinder free movement across European airspace. Spain simply cannot accept that Gibraltar is part of the United Kingdom and so they want Gibraltar to be excluded from the EU aviation law.

"This is nonsense and blocks the whole process for implementing the Single Sky Initiative until agreement is reached. I hope that this issue will help other member states to realise the difficulties that Gibraltar and the UK constantly suffer in the face of ‎Spanish hostility. “

The EU Commission has been warned it is time for tough choices to bridge the widening gap between its spending commitments and available money.

Conservative MEP Richard Ashworth issued the caution after the Commission published its new proposals for the EU's 2015 budget. The revised plans were rapidly drawn up last week after negotiations between national governments and the European Parliament over an initial draft ended in stalemate.

Conservatives welcomed some aspects of the new proposals, including a reduction in overall payments, but remained concerned about the continuing lack of will to tackle the structural problem which sees the EU burdened with ever larger unpaid bills as commitments outstrip planned payments.

Mr Ashworth, Conservative MEP for the South East and spokesman on budgets, said: "On the one hand, this budget is a step in the right direction with a renewed focus on jobs and growth. It also sees a cut of 800 million in the level of payments when compared with the original Commission proposal, plus a larger  margin for contingencies.

"However, it does little to address the longer-term health of the EU budget and how it is managed...There is still still the problem of unpaid bills left over from 2014 which will eat into that contingency margin. 

"A contingency buffer is not really worth its name if it ends up going on foreseeable expenditure."

"Until the Commission starts to make hard choices about how we are going to get our house in order in the longer term, there will be no solution to the payment gap and ever increasing unpaid bills. The EU budget will only become more unsustainable."

Budget negotiations between the EU Council and European Parliament will begin on Tuesday.

Politicians should step back from official inquiries into competition matters and not attempt to pre-empt them, a senior British MEP cautioned today.

Vicky Ford, Conservative chairman of the European Parliament's Internal Market Committee, issued the warning as MEPs backed the possibility of obliging major internet companies to separate the operation of their search engines from other commercial services.

The move was interpreted by some media outlets this week as a direct political challenge to market-leader Google, which is already the subject of an EU Commission inquiry into alleged anti-competitive practices through favouring its own services in search results.

Conservative MEPs responded to the motion by tabling a series of amendments to highlight the huge potential of e-commerce and the importance of creating the digital single market rapidly to remove barriers to trade over the internet. A further amendment stressed the need for unbiased search functions and for the commission to prevent abuse.

Mrs Ford, Conservative MEP for the East of England, said: "The internet must remain open and all users should be treated equally. Increases in content have put pressure on providers who need to be able to manage traffic and we need to encourage further infrastructure investment. Nonetheless, anti-competitive behaviour in this sector is not acceptable. Players should not abuse their market position by promoting interlinked services above that of other players in a non-transparent manner. It is important that searches and results for users are unbiased and that internet searches are non-discriminatory. 

"However, this is a competition law issue and the EU commissioner for competition plays an important legal role in this area. It is important that this investigation remains independent.

"In the past, where competition laws have been breached, the EU competition commission has used many remedies including fines and ring-fencing or even asked companies to spin off parts of their operation. We must be very clear that voting through this resolution should not be taken as an instruction to the commissioner as what to do. It would be entirely inappropriate for the European Parliament to prejudge the legal process of the investigation."

President Juncker's €315bn EU Investment Package needs to unlock private investment, but it cannot be a substitute for economic reforms that will encourage more private investment into Europe's economy, Syed Kamall, leader of the European Conservatives and Reformists Group said this morning.

Speaking in the debate where President Juncker launched the initiative, Dr Kamall warned that many private investors are wary of investing in government projects, and said that projects must deliver real added value, without passing real risks onto European taxpayers.

"How do we avoid a situation where for private investors it's heads they win, tails taxpayers lose?" the London MEP asked.

Asking President Juncker for more detail on the initiative, he said the commission also needs to ask the broader questions about why companies are not investing in Europe, and particularly the eurozone at the moment.

Responding to President Juncker's analogy that the fund will act like a watering can for Europe's economy, he said:   

"I like your analogy of using the watering can. How do we make sure it is a watering can that stimulates growth? How do we make sure that it's not a government flood that washes away private investment? Or a private irrigation system that is never turned on?" 

He went on: "What we need are detailed answers to some of our questions. I've talked to a number of private investors, and asked them what stops them from investing. I was talking to a large institutional investor last week with over 600 billion Pounds of assets under management and they told me that quite often government projects are fanciful. They don't see any real return. How do we make sure that we have projects that are attractive to private investors?

"Venture capitalists tell me that they don't invest. That the Alternative Investment Fund Managers Directive and other EU legislation make the EU less attractive to invest. How do we tackle those issues?

"A former German industrialist was talking to me the other day and he said why is it that the non-eurozone is so much better at attracting investment than the eurozone. Is the euro the key to that question?

"But the key to the package is how do we unlock this investment? How do we make sure that we're not just talking about money and that we have the reforms that unlock these investments.

"Let me give you a couple of examples. A few years ago a British company wanted to invest in Brindisi in Italy. They spent over 11 years trying to invest in a LNG terminal. A huge infrastructure project. But they walked away after 11 years because of bureaucracy and frustration. How do we make sure that red tape like that doesn't stop investment in infrastructure?

"Or the other example of Castellon airport. Millions of Euros of public money, but forty-four months after being inaugurated it hasn't opened.

"So the questions we have to ask are, how do we unlock this private investment without taxpayers taking on the burden of risk? How do we avoid a situation where for private investors it's heads they win, tails taxpayers lose? And how do we avoid more Brindisi's or more Castellon's?

"Answer those questions Mr Juncker, give us real detail about these investments, tell us why the private sector is not investing at the moment, and maybe then we can support your project." 

Ashley Fox is the new leader of Britain's 19 Conservative MEPs.

He was elected in a ballot of his colleagues today after former delegation leader Syed Kamall stood down to concentrate on his role as leader of the broader international grouping of European Conservatives and Reformists, which is now the third-biggest in the European Parliament.

A former solicitor, Mr Fox has been MEP for the South West and Gibraltar since 2009 and is Conservative industry spokesman in the parliament, as well as chief whip of the ECR Group.

He has taken the lead in the Conservative "Stop the Travelling Circus" campaign to scrap wasteful sittings of the parliament in Strasbourg and give it a single seat in Brussels.

A dedicated supporter of Gibraltar's British sovereignty, Mr Fox has applied constant pressure to both the EU Commission and the UK Foreign Office for a robust response to Spanish incursions into our waters and against deliberate tactics to by customs officials to hamper regular border crossings from The Rock.

He said:  "I feel truly honoured to have been chosen by my colleagues to lead them.  My priority will be to drive forward the Prime Minister's reform agenda, so that Britain can renegotiate its relationship with the EU. Then a Conservative government will put that new deal to the British people in a referendum.

"Europe has to change and its people are crying out for that change. I will work to form alliances across nationalities and across political divisions to ensure that reform is central to all we do.

"I will ensure that Conservative MEPs continue to bear down on EU waste and mis-spending and keep up pressure to cut the EU's cost to taxpayers. We will fight to slash the over-regulation that comes out of Brussels and hamstrings business – especially the small enterprises that should be the lifeblood of economic revival.

"Of course, I shall not forget my duty to promote the interests of the people of the South West and to defend Gibraltar and its people from Spanish aggression."