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EU says Spain, Portugal fail to meet deficit targets

Xinhua, July 8, 2016 Adjust font size:

The European Commission on Thursday said that Spain and Portugal would not correct excessive deficit by given deadlines, and are in violation of European Union rules on government overspending.

The Commission made an announcement on the assessment of the fiscal situation of Spain and Portugal, saying both countries had "come a long way" to restore financial stability and regain competitiveness, but had failed to take effective measure to reduce deficits.

"The Commission concluded that Portugal did not correct its excessive deficit by the deadline of 2015 and that Spain is off-track to correct it by the 2016 deadline. For various reasons, the windfall from higher growth and lower interest rates were insufficiently used to reduce deficits and debt," European Commission Vice President Valdis Dombrovskis said in a press conference.

If the assessment is endorsed by EU finance ministers, the Commission could propose fines against the two countries. Portuguese Prime Minister Antonio Costa has warned that imposing fines or sanctions would give rise to euroscepticism in the country.

Eurozone member states are supposed to limit their deficits to three percent of GDP, but Portugal's deficit reached 4.4 percent last year, while Spain's deficit is expected to reach 3.9 percent at the end of this year. Among eurozone members France and Italy are also exceeding the deficit limit. Endit