The European Commission has plans to penalise both Spain and Portugal for missing their respective budget deficit reduction targets. As it is hardly helpful to start issuing fines, the idea is to give each government more time to get to grips with their budgets.
The all-powerful Commissioners plan to impose sanctions and immediately suspend them, just to make a point.
If fines were applied to Portugal, the bill this year would be €359 million (€2.16 billion for Spain), so it is likely that this whole waste of time and effort will result in no change in policy for the countries affected and no fines will be insisted on by Brussels.
The Commission wants to be seen to increase pressure on economic miscreants but is unlikely to be heeded as both countries have enough on their political plates without bothering with this charade.
The European budget rules were given some teeth in 2011 when financial penalties were dreamt up for those whose economies were outside the European norms of a budget gap no higher than 3% of GDP or debts higher than 60% of GDP – Portugal’s currently is at 130%.
The Commission is deciding whether to issue fines to Spain and Portugal, if so they will be sent out at the end of May but it has not yet decided whether it will be wasting everyone’s time, or working with governments to develop local economies and tighten up on EC grant fraud whcih remains rife.
Portugal's Prime Minister Antonio Costa resisted putting forward an economic Plan B, a plan insisted on by the Commissioners, but finally conceded with a document deliberately designed to appear so horrific that his agreed economic Plan A shone by comparison.
Fiddling around with fines that are then dropped will not be the best use of Costa's time as Portugal currently has more pressing demands on his intellect.
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One weakness of DBRS is that it is owned by a consortium led by The Carlyle Group and Warburg Pincus. Who are themselves global investment firms. So they may see more monetary return from the gamble of keeping Portugal out of a 2nd BailOut. Than in it.
Intending maybe a fire sale of Portuguese Government Property ? Useful assets in a portfolio if bought cheap enough.
What are these idiots playing at? The mental capacity of our rulers in Brussels/Strasbourg (they are making their monthly move today - cost £130 million) is at pond level.