After assessing Draft Budgetary Plans (DBP) submitted by Portugal and Spain in mid-October the European Commission concluded that the procedures should be suspended.
"The Commission has come to the conclusion that the Excessive Deficit Procedures of both Member States should be held in abeyance. Accordingly, the event that required a proposal by the Commission to suspend parts of the European Structural and Investment Funds is no longer present and there will be no such proposal," the press release said.
The European Commission stressed that actions taken by the two countries had positive impact on their economies.
"EU Commission concludes that action by Spain & Portugal is sufficient to avoid a suspension of EU funding," European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici wrote on his Twitter account, referring to the EC conclusions.
The SGP aims at preventing member-states from following potentially dangerous fiscal policies, as well as at correcting excessive budget deficits or excessive public debt burdens.