BERLIN – Germany’s European Union commissioner pressed Monday for action against Spain and Portugal for failing to meet their budget targets, arguing that Brussels must act to maintain its credibility.
The EU’s executive Commission refrained in May from imposing immediate fines, saying it would revisit the situation in July.
The EU wants countries to keep their budget deficits below 3 per cent of their annual GDP. Though countries can be fined up to 0.2 per cent of their GDP if they fail to implement measures to meet the limits, no nation has yet been fined.
“If the Commission wants to preserve its credibility on upholding budget rules, we have to approve sanctions against Spain and Portugal,” Commissioner Guenther Oettinger was quoted as telling German daily Bild. “If we give ourselves common rules, they must be kept to.”
Portuguese Prime Minister Antonio Costa, whose centre-left government is reversing previous austerity measures with the support of the Communist Party and radical Left Bloc, is fighting possible sanctions.
Costa said Monday that the 2015 budget deficit, when stripped of one-off measures such as rescuing a failed Portuguese bank, came to 3.2 per cent — only slightly over the limit.
“It makes no sense to sanction Portugal,” he told reporters in Lisbon. Costa has warned that penalties could knock Portugal’s recovery off track as it aims to get the deficit below the limit this year.