Portugal, Spain Face Sanctions After Failing to Correct GDP Deficits

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Portugal and Spain are facing sanctions after failing to take action to correct their excessive GDP deficits, EU's Economic and Financial Affairs Council said Tuesday.

BRUSSELS (Sputnik) — The Council's decisions will trigger sanctions under the excessive deficit procedure. They are based on article 126(8) of the Treaty on the Functioning of the European Union, the statement reads.

"On 12 July 2016, the Council found that Portugal and Spain had not taken effective action in response to its recommendations on measures to correct their excessive deficits. It confirmed that the two countries will not reduce their deficits below 3% of GDP, the EU's reference value for government deficits, by the recommended deadline. And in both cases, it found the fiscal effort to fall significantly short of what was recommended," the Council said in a statement

Portugal and Spain's flags wave at the balconies of a narrow street of Lisbon's Mouraria neighborhood (File) - Sputnik International
Eurozone Ready to Sign Off on Sanctions Against Portugal, Spain
Eurozone finance ministers have agreed to officially declare the two countries in breach of EU public spending rules, a key step prior to imposing penalties on the member states.

The ministers are following recommendations of the European Commission, the executive branch of the EU, despite growing fears that imposing penalties will further undermine the authority of Brussels in the wake of the Brexit referendum.

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