Was the EU right not to sanction Spain and Portugal?
Despite their high budget deficits, the EU Commission has decided not to impose any kind of fines on Spain and Portugal. Some commentators argue that this undermines the EU's Stability Pact, while others say that punishing two countries in such difficult situations is pointless.
Commission undermines stability pact - Handelsblatt, Germany
The EU Commission made its decision with other potential deficit sinners in mind, criticises the Handelsblatt: "How can anyone continue to take the Brussels budget watchdogs seriously if they never sanction violations of the stability pact? ...The governments in Lisbon and Madrid both made costly election promises and at the same time have recoiled from implementing key structural reforms. The Commission should at least have reacted with a minimal symbolic punishment. But its failure to do so maybe have something to do with other chronic budget violators. In 2017 - a presidential election year - France is supposed to finally push its state deficit below the three-percent mark. ...The Commission would not be able to let France get away with it next year if it had punished Spain and Portugal this year. Which is why they got off scot-free." (28/07/2016)
EU gives in to southern member states again - De Telegraff, Netherlands
The EU Commission has lost all credibility, De Telegraaf maintains: "Spain and Portugal are not sticking to the rules. Yet Brussels has decided to give them (even) more time to get their affairs in order. No punishment, then. EU Economic Affairs Minister Pierre Moscovici has justified the decision saying that mistakes were made but it's the future that counts now. But isn't credibility a key factor for the future? The Eurozone is turning more and more into a monetary union in which weak members aren't being corrected in time, and are bailed out as soon as things start going wrong. The results of the bank stress tests come out this week. Will the member states fill the gaps with tax money, contrary to the new agreements? That will be another test for Brussels' steadfastness." (28/07/2016)
Not a victory for Spain's government - El País, Spain
El País applauds Brussels' decision not to sanction Spain for its excessive deficit for the time being is a wise one but says that the Spanish government can't chalk it up as a success: "It's clear that the Spanish economy didn't deserve this punishment - unlike the government, which cut taxes in the middle of the budget consolidation programme - and that even a modest fine wouldn't solve the problem of financial stability. Even if the economy got off lightly (for the time being at least - because a resolution on structural funds is still pending) no one can call this a political triumph after four years of failed deficit correction. …It has to be said, though, that the conditions imposed by Brussels are difficult to fulfil. This year the deficit has exploded and to bring it down to below 5 percent again would be an almost impossible feat. …Especially bearing in mind that the transitional government is simply using stop-gap measures to resolve a problem that, as Brussels keeps stressing, is of a structural nature." (28/07/2016)
A politically wise decision - Der Standard, Austria
Der Standard argues that the EU Commission has made the right decision: "It reflects the historic conflict between Germany and France that has been playing out in the Eurozone since 1998, with the other states in between. In Berlin are the guardians of the purist euro doctrine, in Paris the statists who put politics and growth before stability. From this perspective the Commission's decision not to impose fines on Spain and Portugal is a wise one. The Eurozone countries must act in unison, coordinate measures and create a flexible economic and monetary union. The Union has always fared better when its members seek profit and progress together rather than competing against each other. No one should be more aware of this than the euro's main beneficiary, Germany." (28/07/2016)