Brussels, 11/07/2016 (Agence Europe) - The eurozone finance ministers take the view that Spain and Portugal did not carry out sufficiently effective actions to comply with their budgetary trajectories between 2013 and 2015.
There is “unanimity” among the ministers over the draft recommendations of the European Commission, Eurogroup President Jeroen Dijsselbloem announced on Monday 11 July. According to these draft recommendations, the two Iberian countries did not take enough effective measures to reduce their deficits in either nominal or in structural terms (EUROPE 11589).
Under the revised Stability and Growth Pact, only eurozone countries not directly concerned get a vote on the issue, in this case the 18 ministers with the exception of Spain and Portugal.
“The aim today was not to talk about sanctions. The question of fines will be discussed if it arises. That was not a matter for today”, said the Commissioner for Economic and Financial Affairs, Pierre Moscovici. He said that the European Commission would present fresh trajectories, “in the very near future”, that Spain and Portugal would have to stick to in order to bring their nominal public deficits below the 3% of GDP mark. In June, the European institution proposed giving them a year extra to do so, making it 2016 for Lisbon and 2017 for Madrid.
In all likelihood, the Ecofin Council of Tuesday 12 July will adopt both draft recommendations (see other article). From Tuesday, the Commission will have 20 days to propose sections (financial penalty, suspension of the structural funds), whereupon the Council will have 10 days to block this proposal. The eurozone finance ministers are calling on the Commission to act as quickly as possible to give as much clarity as possible to the uncharted waters of a stage of the excessive deficit procedure never yet triggered. I hope that the Commission will present a “wise” proposal, Dijsselbloem said.
In the Spanish corner, Minister De Guindos said that he was increasingly certain that his country would be given a zero financial penalty. It will depend on the efforts to be made by the future Spanish government to correct its excessive deficit between now and 2017, which is the Commission's favoured scenario. We will see how the effort will be divided over the years 2016 and 2017, said Moscovici. (Original version in French by Mathieu Bion)