Spain and Portugal
The European Commission delays decision on the two countries deficitsMay 19th, 2016
According to the latest news, the European economics commissioner Pierre Moscovici decided to postpone potential action over countries breaking budget rules until July. The reason behind it is to avoid handing a propaganda weapon to those who are pushing for Britain to leave the EU. Brussels said that the potential postponement is related to the general election in Spain the 26th of June, three days after the referendum on Britain’s EU membership.
The announcement comes from the European commissioner for economic affairs, Pierre Moscovici, who said that Spain and Portugal will have more time to repair their public finances, and this would be positive also for David Cameron. The European Institutions in Brussels want to see further action to reduce borrowing, and they will review the position of the two countries in early July. Using the words of Moscovici, “We are proposing new deadlines for both countries to correct their excessive deficits. We propose that each country receives one extra year and one extra year only. The new deadline for Portugal will be 2016, and for Spain, 2017.”
As regards Spain, some notorious economists said that the decision makes sense technically as a new government in Madrid would be needed to implement any possible recommendation from the commission. With most Eurozone countries desperately trying to revive growth and tackle unemployment, this decision seems to be the right one. Additionally, Brussels granted Italy the maximum flexibility under EU fiscal discipline procedures in response to demands from Rome to be given more space to revive anemic growth and to cope with the cost of dealing with the refugee’s crisis.
News from Berlin
Paola Pluchino, CD News