AS HAS appeared increasingly likely, the European Union executive has climbed down on its pledge to slap sanctions on Iberian duo Spain and Portugal for failing to meet deficit targets, with commissioner, Pierre Moscovici, citing the current anti-EU sentiments sweeping the continent as the primary reason for the about face.
“Sanctions, even symbolic ones, would not have been understood by the public,” he said. “It is not the best approach at a time when doubts are widespread in Europe.”
The landmark move has thus been vetoed once more, with Moscovici twittering about “new fiscal paths” for the debt-ridden nations, which have both posted budgets exceeding the current EU limit of 3 per cent of GDP for a number of years.
If it had followed EU regulations to the letter, the executive could have imposed fines of up to 0.2 per cent of GDP, but has now asked Spain to bring its deficit in line before 2018, while Portugal should aim to lower its deficit to 2.5 per cent by the end of this year.
“Spain and Portugal have come a long way. The two countries experienced severe economic and financial crises,” gabbered EU Commission Vice-President, Valdis Dombrovskis. “They have managed to restore financial stability thanks to major fiscal adjustment. And they have turned their economies around through structural reforms to regain competitiveness. These efforts should not be underestimated.”
Spain’s acting deputy Prime Minister, Soraya Saenz de Santamaria, was understandably relieved, as she propounded that the EC’s decision displayed “recognition of the reforms carried out and the effort made to control the deficit in seriously difficult times.”
In 2015, Spain reported a whopping deficit of 5.1 per cent of GDP, whereas Portugal forecast that their debts will fall from 4.4 per cent last year to just 2.2 per cent in 2016.