The European Commission has deferred any disciplinary action against Spain and Portugal over their excessive budget deficits until after a Spanish general election in June. Italy's budget won't be assessed until November either. As David Pollard lools at why
There's been tough talk. In the event, there's little tough action - yet .... The European Commission sparing Spain and Portugal from sanctions for breaching EU deficit rules. (SOUNDBITE) (English) EUROPEAN COMMISSIONER FOR ECONOMIC AND FINANCIAL AFFAIRS, PIERRE MOSCOVICI, SAYING: "We propose that each country receive one extra year ... So that the new deadline for Portugal will be 2016 and for Spain, 2017." That could be music to the ears of Mariano Rajoy. The Commission apparently sparing the Spanish prime minister too - from embarrassment in the run-up to elections. A pledge he's reportedly made to cut taxes further - if re-elected - could still lead to further squabbles with Brussels. Such a move at risk of putting Spain even further away from the EU's deficit limit of three per cent of GDP. (SOUNDBITE) (English) CITI EUROPEAN ECONOMIST, CHRISTIAN SCHULZ, SAYING: "Overall, the euro zone's fiscal position is better than major rivals such as the UK or the US ... But on an individual country basis, there's clearly still severe risks, with some countries with very high debt ratios and still underlying weak fiscal positions." Italy too singled out for 'extra vigilance', according to Moscovici. It's already been granted budget deficit flexibility - in part due its migrant crisis. And has managed to just stay within the rules, for now ... (SOUNDBITE) (English) CITI EUROPEAN ECONOMIST, CHRISTIAN SCHULZ, SAYING: "This is all predicated at the moment on low interest rates. Once interest rates rise, the risk to the Italian sovereign rises as well, and Italy needs to do as much as it can to get debt on a downward trajectory." Italy is now due for a further review in November. Spain and Portugal will get further reviews in July.