MADRID (Sputnik) — EU sanctions against Portugal and Spain for failure to take action to correct their excessive GDP deficits are "baseless" and "counterproductive," Portuguese Prime Minister Antonio Costa said Tuesday.
"The decision itself [to impose sanctions] is not news. We have ten days to respond. And we are working on it. Sanctions against Portugal and Spain are baseless. It will be counterproductive to impose these sanctions," Costa said as quoted by the Lusa news agency.
Earlier on Tuesday, EU economic ministers recognized that Spain and Portugal had not acted in time to rein in their budget deficits to keep excess government spending below 3 percent of GDP in order to meet EU reference values. The Economic and Financial Affairs Council gave both countries 10 days to prove otherwise, with the final decision on fines and other sanctions due to be taken in 20 days. The fines may amount to as much as 0.2 percent of GDP, but may also be less.
Spain's 5.1-percent of GDP deficit last year fell short of the targeted 4.2 percent, while Portugal missed its 2.5-percent target with a 4.4 percent deficit.
