Portugal opposes European Commission's sanction over national budget

Portuguese Prime Minister Antonio Costa said Monday he would not consider additional measures to avoid a sanction from the European Commission, the executive arm of the European Union.

"There is no space for new measures to resolve problems from 2015," he told journalists at a ceremony in Lisbon, according to Portuguese Lusa News Agency.

His comments came after the European Commission decided whether to impose a fine on Portugal for exceeding a budget deficit of 3 percent last year.

The European Commission has said the only way Portugal can avoid a sanction is by correcting its excessive deficit.

While officials from the European Commission feel that not applying the sanction would lead the European Union's credibility to be undermined, Portuguese officials have argued that such sanctions would be immoral.

In fact, Catarina Martins, the leader of Portugal's Left Bloc, an ally of the Socialist government, has suggested that a referendum should be held in Portugal if the European Commission goes ahead with the sanctions.

"If the European Commission penalizes Portugal for the previous government's poor performance ... it would mean the European Commission declaring war on Portugal," Martins said during the weekend.

The Portuguese President Marcelo Rebelo de Sousa has pointed out that neither the previous government, nor the present government, deserve to face sanctions, highlighting the country's efforts to put an end to the financial crisis.

Costa, who came into office in November 2015, wants to put an end to harsh spending cuts and tax hikes that Portugal had to undertake in 2011, when the country agreed to a 78-billion-euro(87.01 billion U.S. dollars) bailout program with international lenders.

While Costa was forced by Brussels to raise indirect taxes by almost 1 billion euros, he is now resisting further spending cuts.

The European Commission is expected to make a final decision on the matter by Tuesday.

The Bank of Portugal forecasts growth of Gross Domestic Product (GDP) to be 1.3 percent in 2016, accelerating to 1.6 percent in 2017 and declining to 1.5 percent in 2018. The central banks says the end of the projection horizon will be close, but still below, that observed before the international crisis in 2008.

Eurostat revealed in April that Portugal's deficit was the third highest in the Eurozone, ending 2015 at 4.4 percent, due to resolution costs of bank Banif. The country missed its deficit target last year of 2.7 percent. Enditem