ORIGINAL: Uncle_Joe
The other (slightly more radical) suggestion was to start Spain as a Frozen Minor Ally of Germany. This means she cant be attacked, although her resources already count for Germany. At least this way, Germany has to actually TRY to take Gibraltar rather than just waltzing in at their leisure. I would further suggest that Spain activates if the Germans take London or Moscow or if the Allies invade Portugal.
You know I really like this idea. Historically Spain did send a division to Russia, and was clearly pro-axis. I have no question the would have reacted negatively to an invasion of Portugal.
This solves the problem that it is TOO easy to make the Med an Italian lake.