SPAIN has been warned by Brussels it could be refused a huge amount of financial support if it fails to get its budget deficit under control.
Spain coudl be punished by the EC for failing to get its budget deficit down
The European Commission has to re-rule on the possible freezing of funds for Spain, after consulting the European Parliament later this month or in early October.
It's thought president Jean Claude Juncker is in favour of applying the first sanction if the Spanish government fails to fulfil its commitments to start taking measures to reduce the deficit in the second half of 2016 and in their draft budgets for 2017.
Spain has been spared a fine of up to €2million (£1.7m) but could have €1.3m (£1.1m) of European Commission financial support frozen.
However, Commissioner of Economic Affairs, Pierre Moscovici has argued against punishing Spain for fear it could create a backlash against the eurozone project.
Mr Moscovici warned that a possible fine would lead to a "loss of support for the European project," and reminded the "exceptional efforts" of Madrid during the last years of crisis reducing public deficit and implementing structural measures.
The French commissioner also noted the "risk of causing unnecessary divisions" among European countries.
Under EU rules countries are required to keep deficits below three per cent.
The comments were revealed in EC meeting minutes published about a discussion that took place on July 27.
Spain's deadline for addressing the deficit had been extended by two years from 2012 to 2014 - and then another two years until 2016 - as the economy continued to struggle under high unemployment and low growth.
It had been given targets of 6.5 per cent of GDP for 2013, 5.8 per cent for 2014, 4.2 per cent of GDP for 2015 and 2.8 per cent of GDP for 2016.
But the deficit still amounted to 5.9 per cent of GDP in 2014 and 5.1 per cent of GDP in 2015.
http://www.express.co.uk/finance/city/712604/Brussels-could-PUNISH-Spain-for-budget-failings-by-freezing-1million-of-financial-support
