Overspending Spain And Portugal Await EU Fate

Overspending Spain and Portugal await EU fate

BRUSSELS, (UrduPoint / Pakistan Point News - 27th july,2016) - The European Commission will decide Wednesday on whether to hit Spain and Portugal with huge fines for failing to fix years of high deficits in violation of EU rules. A decision to impose penalties would be an unprecedented step in EU history, made in the face of rising anti-Brussels sentiment as demonstrated by Britain's vote to leave the bloc. Under bloc rules, the EU executive can impose fines of up to 0.2 percent of national gross domestic product (GDP) -- but to date it has not dared to use its full power against eurozone overspending for fear of triggering a populist backlash. Spain faces a fine of up to nearly 2.2 billion Euros ($2.4 billion), while Portugal is on the hook for 360 million euros, based on GDP data for 2015. The 19 ministers from the eurozone agreed to launch the unprecedented process earlier this month, but expectations are high that the EU executive will show leniency given the political context.

"Be patient, we are hours away from a decision," said Commission spokesman Margaritis Schinas at a news briefing on Tuesday, refusing to confirm rumours that Brussels would show clemency. The commissioners, who meet until about 1030 GMT, can also decide to suspend EU structural funds to Spain and Portugal. These funds are used to address regional disparities within the 28-nation bloc and would be an embarrassing blow to the two countries, both big users of the EU money. But the Commission must agree on this step with the European Parliament -- and that discussion will take place only after the summer recess, a European source told AFP.