Monday 11 July 2016

Spain, Portugal Have Violated Budget Laws

Spain and Portugal are in violation of budgeting rules. However, analysts believe that in light of the current economic situation the two countries may likely face light penalties. Others believe the soft penalties are due to decrease anti-EU sentiment in the continent.



The acknowledgement of Eurozone Finance ministers came on Monday and would go to all the 28 EU finance ministers on Tuesday.

The members would vote to support the commission's recommendation for penalties unanimously.

The two countries may submit a no request for no sanctions within 10 days along with pledges to improve their budget outlook.

French Finance Minister Michel Sapin said on Monday that action towards Spain and Portugal should be soft because of the countries' enormous efforts in the previous years. Excessive discipline, according to Mr Sapin, is not needed.

Meanwhile, Spanish Finance Minister Luis de Guindos was optimistic the commission would avoid "a senseless fine against Spain.


The two countries have been under the EU's excessive deficit procedure since 2009. Spain had cut its budget hole in half from nearly 10 per cent in 2012. Despite the cut, it still remains off the 4.2 per cent target set by the commission and above the 3 per cent EU threshold.