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Portugal rejects EU proposed fine for not meeting deficit target

Xinhua, July 19, 2016 Adjust font size:

The Portuguese government sent a letter to the European Commission on Monday, rejecting an EU proposed fine for not meeting its deficit target in 2015.

"Portugal reduced its public deficit of 8.6 percent of GDP in 2010 to just above 3 percent in 2015, excluding one-offs," Finance Minister Mario Centeno pointed out in the letter sent to the European Commission Vice President Valdis Dombrovskis.

He added that that reforms carried out by the country under a 78 billion euro bailout package signed in 2011 led to recession, a rise in unemployment and a massive emigration of young qualified workers.

In addition, he said that a sanction would be a "disproportionate measure about the past" in a difficult international context.

"Sanctioning the past does not make policial or economic sense in the case of countries that are already taking effective action, as is the case of Portugal," Centeno said.

To conclude, the Portuguese government said the country is on "the right path to eliminate the excessive deficit" and the fine "would be counterproductive as it would damage the efforts to succeed in that task."

The Portuguese government said a sanction would also have a negative impact on the Portuguese peoples' support for the European project.

"In addition to the economic and financial damages, there would be a highly negative impact on the level of support for the European project in Portugal, which is largely consensual in Portugal since 1976. For all these reasons, sanctions would never be understood by the Portuguese population," said the government.

Acting Spanish Prime Minister Mariano Rajoy also rejected EU deficit reprisals on Monday, promising the country would reach the growth of more than 3 percent this year and rejecting further cuts of 10 billion euros. (1 euro = 1.11 U.S.dollars) Endit