EU launches sanctions procedure against Spain, Portugal

Eurozone finance ministers agreed today to officially begin a sanctions procedure against Spain and Portugal for doing too little to fix their rule-breaking deficits.
The ministers "found that Portugal and Spain had not taken effective action in response to its recommendations on measures to correct their excessive deficits", a statement said.
The decision "will trigger sanctions under the excessive deficit procedure."
Spain and Portugal now have 10 days to lobby the EU to impose no penalty.
The European Commission, the EU's executive arm, will consider their arguments and must decide on sanctions within 20 days.
Under EU rules, the commission could impose fines of up to 0.2 per cent of gross domestic product on eurozone countries that repeatedly ignore the deficit limits -- but to date it has not dared to use its full power.

The ministers took the unprecedented step despite fears that too much austerity by Brussels will further stoke anti-EU populism after the Brexit vote.

"The rules are the rules," said French Finance Minister Michel Sapin, ahead of the talks with his EU counterparts.
However, he said these should only be applied "intelligently" as he urged the EU to take the specific situation of each country into consideration.
Hit hard by the eurozone debt crisis, Spain and Portugal have been under the EU's excessive deficit procedure since 2009 because of recurrent fiscal holes.