Ecofin supports sanctioning process excessive deficit to Spain and Portugal – Yahoo Finance Spain

By Francesco Guarascio

BRUSSELS (Reuters) – Finance ministers of the European Union on Tuesday endorsed a process of sanction excessive deficit Spain and Portugal, paving the way for the EU executive to propose possible fines over the next 20 days.

the European Commission said last week that Madrid and Lisbon had not done enough to correct their deviation the deficit in the years 2014 and 2015, initiating a formal process that could trigger sanctions, although to date have never been applied.

In a regular meeting in Brussels, the finance ministers of the EU supported the decision, a decision was expected.

The two countries risk being fined up to 0.2 percent of its Gross Domestic Product (GDP) and partial suspension of EU structural funds, but they can make representations to reduce or cancel penalties in the next ten days.

Minister Spanish Economy in office, Luis de Guindos reiterated that provides that the Commission does not propose a fine or that it is “zero” or symbolic, and insisted that more budgetary measures were not necessary since the deviations correspond to previous years.

The Portuguese Minister agreed that further steps were necessary.

Spain over six months with a caretaker government after going to the polls twice, so it has little room to propose new measures to reduce its deficit. The Commission expects to close the year with a deficit of 3.9 percent of GDP, above its forecast of a maximum of 3.7 percent, still above the 3 percent limit set European standards.

Portugal reduce its deviation below three percent this year, but the Commission believes that it will break the fiscal target committed to its European partners.

the Commission now has 20 days to propose the fine and is likely to announce its decision on July 27, at its last meeting before the summer holidays, according to European officials.

Brussels could propose that no penalties apply if Madrid and Lisbon prove that there were exceptional circumstances they made them violate the tax law. The EU countries will have to support the proposal.

“There is certainly the possibility within this procedure for countries to submit proposals motivated to reduce potential sanctions or possibly even reduce them to zero,” Valdis said Dombrovskis, the commissioner responsible for the euro.

Several ministers stressed that the option of zero penalties was on the table.

“sanctions are clearly set out in the treaty, up to 0 ., 2 percent But the “up” means it can be less or even zero, “said Austrian Finance Minister Hans Joerg Schelling

.