Brussels, 06/07/2016 (Agence Europe) - The Spanish Minister for the Economy, Luis De Guindos, visited the headquarters of the European Commission in Brussels on Wednesday 6 July, to plead the cause of Spain, a country in a strong growth situation but with a deficit which deviates from the trajectory agreed upon at European level.
According to reports in the Spanish press, talks between De Guindos and the Commissioners for Economic and Financial Affairs, Pierre Moscovici, and the Euro, Valdis Dombrovskis, did not touch upon the possibility of sanctions, which may take the form of financial penalties (maximum 0.2% of GDP) or a suspension of the country's structural funds, in line with the revised Stability and Growth Pact.
Spain and Portugal are on manoeuvres to minimise the potential impact of the Commission's recommendation, anticipated for Thursday or Friday, which could state that neither country has taken sufficiently effective measures to reduce their public deficits (EUROPE 11587). Such a recommendation would open the door to sanctions, even token ones.
On Wednesday 6 July, however, there was still uncertainty as to whether this dossier would be included on the agenda of the Ecofin Council of Tuesday 12 July. If the member states put off their examination of the budgetary situation until later, Spain would have extra time, until October, to form a government and undertake to set corrective budgetary measures in place.
European Parliament opposed to sanctions. Over at the European Parliament, the main political groups are not in favour of the prospects of sanctions against Spain and Portugal in a turbulent political context. “We agree with the Socialists”: “the rules should be applied flexibly, but not be broken”, Manfred Weber (EPP, Germany), said in Strasbourg on Tuesday. According to Gianni Pittella (S&D, Italy), now is not the time to punish countries which are on the road to recovery. “Using the term sanctions is an aberration and a serious political error and risks getting all of the citizens' backs up”, he said. Philippe Lamberts (Greens/EFA, Belgium) said that in order for the European budgetary rules to have credibility, “they need to make sense economically”. However, the rules appear to be counter-productive and to be making the situation worse, he said. The GUE/NGL group spoke out against the “blackmail” against the two Iberian countries imposed in the name of the credibility of the Pact. It feels that any sanction is “illegitimate and acceptable”. By acting punitively, “the EU proves that within its own rules, it is impossible to design policies to end poverty”, said Spanish MEP Marina Albiol. (Original version in French by Mathieu Bion and Lionel Changeur)