BRUSSELS (Reuters) - European Union states will not oppose the EU executive’s decision to cancel Spain’s and Portugal’s fines for their excessive deficits, two EU officials said on Friday, despite the head of euro zone finance ministers criticizing such leniency.
Under EU rules, the Council of EU countries could reject the European Commission’s decision within ten days, an option that Eurogroup President Jeroen Dijsselbloem hinted at on Wednesday.
However, the majority needed to block the Commission’s decision was not reached at a meeting on Friday, paving the way for an automatic waiver on Aug. 8, when the 10-day tacit acceptance procedure ends, the officials told Reuters.
Spain and Portugal risked a fine up to 0.2 percent of their gross domestic product (GDP) for breaching EU fiscal rules requiring that their deficit are below 3 percent of GDP.
But the Commission, amid fears of growing euroskepticism in the bloc, decided to waive the fines. Its decision may weaken EU fiscal discipline, but is seen as helpful in not hampering growth in the euro zone’s fragile economies.
As part of the procedure, the European Commission will decide after the summer recess whether to temporarily suspend EU funds to Spain and Portugal next year.
Reporting by Francesco Guarascio and Jan Strupczewski; Editing by Louise Ireland