European Commission officially announced Thursday that Spain and Portugal have breached the deficit rules , the first step toward a possible fine would be the first of this type within the block.
“Both countries have strayed while the path correction of their excessive deficits and not have reached their budgetary targets, “he said in a statement the Vice-President of the European Commission for the Euro, Valdis Dombrovskis.
the vice president warned that” the reduced high deficits and debt levels is a precondition for sustainable economic growth of both countries. “
the finance ministers of the EU (Ecofin) should rule now on the opinion of the Commission although Domobrovskis could not say if it will be on the agenda of the next meeting on July 12 in Brussels.
“I am confident that the finance ministers of the EU will confirm soon our appreciation “, the Commissioner for Economic and Financial Affairs, Pierre Moscovici said on his part.
Then the executive has a within 20 days for a proposed fine and” partial suspension ” of the structural funds. At the same time, Spain and Portugal have ten days to present arguments in his defense.
Since the establishment of new European budgetary procedures after the debt crisis in the euro area , the Commission has the possibility to financially sanction those who do not meet the budget, with fines of up to 0.2% of GDP in the country concerned.
However, explains the Commission, the fine always be canceled “if requested exceptional economic circumstances or following reasoned member State.”
in addition, Moscovici not he ruled that “fines could be zero.”
2015, the Spanish government deficit reached 5.1% of gross domestic product (GDP), the highest in the European Union after Greece, very above 3% set by the so-called stability pact and then the target set by the Commission (4.2%).
2016, the deficit could be even worse, considering that six months ago, Spain is experiencing a political paralysis that forced the calling of new elections on June 26. The chief Mariano Rajoy’s conservative government was strengthened but without an absolute majority.
Portugal had meanwhile 2015 a deficit of 4.4% despite that had set a target to leave in less than 3%.
Although the Commission concludes that neither Spain nor Portugal have adopted effective measures in response to the Council recommendations regarding the excessive deficit, acknowledges however that both countries implemented major structural reform measures.
in this regard, Moscovici said that collaborate “with Spain and Portugal to reach a common understanding of the political commitments to be assumed “.
Following the announcement, Portugal stated that the notification of the Commission was a” diplomatic victory “because it did not involve a specific recommendation to punish Lisbon.
on Tuesday, Spanish Economy Minister Luis de Guindos, had shown convinced that the Commission will not penalize Spain because “it would be a decline in credibility for the whole euro zone. “
De Guindos added that your government plans to” revise upwards [forecast] growth in 2016 “, currently 2.7% of GDP.
If sanctions are confirmed, Spain and Portugal would be the first countries in the euro zone to receive a fine for breach of deficit.
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