The EU's Economic Affairs Commissioner, Pierre Moscovici, (pictured) has performed a U-turn to the benefit of Spain and Portugal by postponing a decision on fining the two countries for running excessive budget deficits.
“We have concluded that this is not the right moment economically or politically to take this step,” said Moscovici today.
The Commissioner’s change of heart was endorsed by the Commission Vice President Valdis Dombrovskis who, with Moscovici, had been pushing to take action against the two southern countries by imposing financial penalties for the first time in the 17-year history of Europe’s monetary union.
The fines would have been symbolic, but Spain and Portugal would have suffered inevitable cuts in EU structural funds to help them through next year.
Commission President Jean-Claude Juncker was insistent that the fines should not go ahead at least until after the forthcoming Spanish general election on June 26th and the Commission will look at Spain and Portugal’s performance at the end of July.
Earlier this week the Commission agreed to give the countries more time in which to sort out their respective budgets with Portugal’s Prime Minister still insisting that there will be no need for a Plan B involving more cuts, despite economic indicators showing a worsening position with unemployment rising and exports sinking.
