The EU is set to delay by three weeks a decision on punishing Spain and Portugal for missing their 2015 deficit targets as it deals with the fallout of Britain’s vote to leave the bloc, European sources said.
The European Commission, the executive arm of the 28-nation union and chief enforcer of budgetary rules for the eurozone, had been expected to announce its decision on Tuesday.
It had already pushed back the announcement until after general elections in Spain on June 26 but is now further delaying the decision while the bloc comes to terms with the shock of Brexit.
“The general objective of the European Commission is not to punish but to encourage countries to find a solution to respect their commitments,” one source told AFP on condition of anonymity.
The ball will now be kicked back to eurozone finance ministers who meet on July 12 to decide how to act, the source said.
They are likely to give Portugal and Spain ten days to put forward plans to solve the situation, followed by a decision by at a meeting of the Commission on July 27.
The delay is a compromise between budget hawks led by Germany and those such as France and southern European states.
Inflicting penalities against an EU member state for public overspending would be an unprecedented step by the European Commission.
Germany’s EU Commissioner Guenther Oettinger said in a newspaper interview Monday that Spain and Portugal should be fined by Brussels for missing the spending targets.
“Neither country met the budget commitments that they had both set themselves,” Oettinger told the mass-circulation daily Bild.
“I believe that if the EU Commission is to maintain its credibility regarding the budget rules, then we will have to impose sanctions on Spain and Portugal,” he continued.