Brussels, 05/07/2016 (Agence Europe) - Caught between supporters of strict application of the Stability and Growth Pact rules and supporters of 'smart' application of the European budget rules, the European Commission is seeking a solution to keep everybody - or nobody - happy in terms of the budget situation in Spain and Portugal.
Lisbon and Madrid have strongly diverged from the recommended budget trajectory (EUROPE 11586), and the Commission cannot fail to recognise that the two countries la Commission have taken enough effective measures to bring their public deficit back below the 3% of GDP cut-off point.
But the European Commission's recommendation making it possible to fine the countries up to 0.2% of GDP will only be formalised later this week when the question is formally added to the agenda of the 12 July ECOFIN Council. “The College had a first discussion today on the 2013-2015 fiscal situation in Spain and Portugal. Decisions to be adopted very soon”, said Economic and Financial Affairs Commissioner Pierre Moscovici.
If on Tuesday the ECOFIN Council postpones examination of the Spanish and Portuguese budget situations, the next deadline would be in October, since finance ministers would not be able to take decisions at their informal meeting in Bratislava in September. This breathing space will allow the Spanish political situation time to chill and possibly see the formation of a new government, which could announce extra budget measures to meet its budget commitments and avoid the prospect of fines. (Original version in French by Mathieu Bion)