Commission to sanction Madrid and Lisbon over national budgets: report

Both countries’ deficits exceed the EU’s limit of 3 percent of GDP.

The European Commission is likely to sanction Spain and Portugal for failing to meet EU national budgetary targets, Euractiv reported on Wednesday.

One source from within the room in Tuesday’s college of commissioners meeting held in Strasbourg confirmed to POLITICO that there was an orientation debate but said no decisions were taken.

There was, however, “a majority that agreed that both countries are candidates for stepping up the procedures,” the source said, adding that “it’s clear that Spain and Portugal are in trouble” for exceeding the EU’s budget deficit limit of 3 percent of GDP.

“For too long, the Commission has refrained from sanctioning [countries], although the Stability and Growth Pact has clearly been violated,” said MEP Markus Ferber of the European People’s Party. “That has harmed the pact’s credibility. Now, the Commission has to withstand all lobbying attempts by Madrid and Lisbon and make full use of its toolbox.”

On May 18, the Commission is supposed to present analysis on every EU country’s budgetary situation, which will be the basis for a decision on possible sanctions.

Both countries had been arguing over the past months for the Commission to grant extra time to comply with the budgetary rules.

Spain, for instance, will hold another election on June 26 after no party succeeded in forming a government following the previous national election in December.