EU should suspend funds for Spain, Portugal: EC

The EU should suspend structural funds to Spain and Portugal after they failed to rein in their debt, according to a letter from the European Commission seen by AFP on Saturday.

Eurozone finance ministers agreed this month to impose unprecedented sanctions against Spain and Portugal for overstepping the bloc’s budget deficit limits.

The penalties would be the first time Brussels has wielded its disciplinary powers over member states’ budgets, in a move that has inflamed tensions over its power.

European Commission vice president Jyrki Katainen said “socio-economic factors,” including the Iberian countries’ high rates of unemployment, should be taken into account when deciding how much to suspend.

“We remain at your disposal to participate in a structural dialogue with the European Parliament on the application of these measures, with a view to make a balanced proposal,” he said in a letter to the president of the European Parliament, Martin Schulz.

Attached to the letter was a list of 12 Portuguese funds and 60 Spanish that could be suspended, either completely or in part.

Structural funds are used to address regional disparities within the bloc. (AFP)