Germany’s EU Commissioner has demanded of the European Commission that sanctions against Spain and Portugal over public debt levels are put into effect without further delay.
'If the commission wants to preserve its credibility on upholding budget rules, we have to approve sanctions against Spain and Portugal,' said Commissioner Günther Oettinger in a direct assault on Commission president Jean-Claude Juncker's and his softer touch.
Personal intervention by Juncker, to delay the introduction of sanctions against Spain and Portugal, has left the matter of sanctions in the air until after the summer break, but this is not acceptable to the German who used an interview with Bild to push his hard line, “If the commission wants to preserve its credibility on upholding budget rules, we have to approve sanctions against Spain and Portugal.”
The EU requires member countries to keep public debt below 3% of GDP - Portugal failed last year, mainly down to the collapse of Banif. Fines can can go as high as 0.2% of the country’s GDP and sanctions can involve funding cuts.
Günther Oettinger said to Bild, "Neither country (Spain or Porugal) met their budget commitments. If we draw up common rules, those rules have to be adhered to."
Neither Spain nor Portugal have notified the Commission about any additional measures being taken to meet new debt reduction targets and Germany, the Netherlands and other northern European EU members have expressed their dissatisfaction over President Juncker's unwillingness to take a hard line with Greece, Portugal and Spain.
To punish Portugal, the Commission may halt all the regional funding programmes that keeps the country flush with other people’s money.
The Commission is to propose to the European Parliament that 16 structural funds in Portugal, all financed by the European Union, are suspended.
The Social and Employment Inclusion programme, operational programmes for the north, centre, Alentejo, Azores, Lisbon, Madeira and the Algarve, the programme for Efficiency in Sustainable Use of Resources and the Operational Programme for Technical Assistance.
Brussels also wants to suspend the Social Inclusion and Employment, and the Human Capital programmes, the Competitiveness and Internationalisation Programme, the Regional Rural Development Programmes for the Açores, Madeira and mainland Portugal, as well as other funding programmes related to fisheries.
All-in-all there are 16 EU programmes that can be suspended to ensure that Portugal comes to the negotiation table in fear and trepidation, not openess and optimism.
In a letter sent by the Commission Vice-President Jyrki Katainen to the President of the European Parliament Martin Schulz, a "structured dialogue" in September is suggested to define the "scope and scale" of the suspension of funds as a penalty for Portugal's violation of the 3% deficit limit laid down in Community rules.
In the letter, it is argued that the rules of the Structural Funds "predict that parts of these funds be suspended if the Council decides that a Member State has not taken effective action in response the recommendations issued in the context of the excessive deficit procedure."
If these 16 structural funds are withdrawn or even suspended for any length of time, the country immediately will suffer - like an addict whose supply of free heroin has been withdrawn.
Portugal has proved unable to stand on its own two feet without substantial EU funding, much of which in the past has been misused, diverted and misappropriated.
With no EU programme funds, the call for a Referendum on continued EU membership for Portugal would increase in volume.
This perhaps is the only trump card Portugal has left to play while the European Community gradually unravels with no clear idea of how to sort out the problems of its southern members.
