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Roundup: EU to decide whether to freeze EU funds in Spain, Portugal in September

Xinhua, August 2, 2016 Adjust font size:

The European Union (EU) was scheduled to make a final decision on whether to suspend structural funds in Spain and Portugal in September, as a possible punitive move after both countries breached EU budgetary rules, said a European Commission spokesperson Monday.

"First of all, we would like to have a structural dialogue with the European Parliament, it will take place in September," Annika Breidthardt, the Commission's spokesperson, told a regular press briefing.

"Then the decision will be taken on structural funds, but we can't say now what that decision will be," she told reporters.

The Commission, the bloc's executive arm, signalled that the suspension could be lifted under certain circumstance last week.

If countries remained on track with a new fiscal adjustment path set by the Commission, there was a possibility that nations would not lose any EU funds, Vice President of the European Commission Valdis Dombrovskis told a press briefing last Wednesday.

The Commission proposed at that time not to impose financial sanctions on Spain and Portugal over their excessive deficits but set out a new fiscal adjustment path for both countries.

Under the new path, Spain and Portugal were set new deadlines to meet their deficit goal.

Portugal, which failed to cut government deficit below 3 percent of gross domestic product (GDP) in 2015, was requested to take "effective measures" to tackle overspending by the end of this year.

Spain was granted another two years to address its excessive deficit, meaning Madrid has to meet the budgetary requirement by the end of 2018.

EU rules requested member states to keep their deficits below 3 percent of GDP, but Portugal's deficit gap turned out to be 4.4 percent in 2015 while Spain's was 5.1 percent. Endit