F rance’s finance minister has warned
Brussels not to punish Spain and
Portugal for breaching European Union
spending limits “for the pleasure of
Michel Sapin said fines would send a
“bad signal” across the rest of Europe as
he urged the European Commission to
“take into account the particular situation
of 2015 and the considerable efforts that
the Portuguese and Spanish people” had
made over the past few years.
While ministers ruled that Spain and
Portugal violated a 3pc budget deficit
limit last year, Mr Sapin said “a bad
signal would be to punish for the pleasure
of punishing.” Madrid and Lisbon now
have ten days to appeal for leniency over
possible financial penalties.
Antonio Costa, prime minister of Portugal,
said possible fines of up to 0.2pc of gross
domestic product (GDP) – were
“unjustified and counterproductive”.
“The European economy and the
eurozone will derive no benefit from
applying sanctions, of any kind, on
Portugal and Spain,” said Mr Costa.
Spain’s budget deficit stood at 5.1pc of
GDP last year, compared with a target of
4.2pc, while Portugal’s deficit stood at
4.4pc of GDP.
Luis de Guindos, Spain’s economy
minister, said it would be a “paradox” if a
fine was imposed on the economy which
had “experienced the most intense
turnaround, grown the most and is
creating most jobs.”
He added: “That’s the reason I am
convinced that there won’t be a fine.”
Jeroen Dijsselbloem, the president of the
Eurogroup of eurozone finance ministers,
said this week that the countries faced
censure from Brussels over their deficit
breaches, but could still escape with
“zero” fines, depending on the proposals
countries suggest to solve the problems.
European leaders also signalled that they
were ready to find a solution to Italy’s
banking woes within the limits of EU
rules. The sector’s bad debts reportedly
total €360bn (£300bn).
“I am very convinced that the questions
that need to be decided there will be
resolved in a good way,” said Angela
Merkel, the German chancellor. “I don’t
see any crisis-like development overall.”