EU will provide Spain and Portugal another three weeks, in order to avoid sanctions because of the budget deficit

The European Commission will give Spain and Portugal three weeks to take steps to reduce excessive budget deficit and avoid the financial sanctions. This was stated by an official, sign with the discussion of this issue.

This step will be a temporary compromise between fiscal "hawks" led by Germany, and supporters of budgetary flexibility that are in favor of greater flexibility in times of weak growth, high unemployment and growing support for parties that support withdrawal from the EU.

Italian Prime Minister Renzi urged not to penalize Portugal and Spain, while the head of the Central Bank of Germany Jens Weidmann opposed the easing of fiscal EU rules, despite the fact that Brexit may adversely affect the rate of economic unit growth in the coming years.

"At a meeting on Tuesday in Strasbourg, the EU's executive board will say that these two countries have not taken effective action to correct its excessive deficit. The Commission will give Spain and Portugal, the time until July 27 to offer effective means to deal with the deficit and avoid financial penalties provided by the EU rules, which have never been used, "- the official said.

In May, the Commission decided to grant Spain and Portugal another year to reduce their deficits, but under pressure from their more militant members, said that will announce its final assessment of the sanctions in July. Recall that in the past year, Spain and Portugal have broken EU budget rules, which require to keep the budget deficit below 3 percent of gross domestic product. In 2015, Spain's budget deficit stood at 5.1 percent, well above the permissible limit and more than the target of 4.2 percent agreed with EU partners. Meanwhile, Portugal recorded a budget deficit of 4.4 percent of GDP.