Friday

6th Dec 2019

'Kafkaesque' EU to freeze Portugal and Spain funds

  • Commission vice-president Jyrki Katainen reminded MEPs they had once broadly backed the rules. (Photo: European Parliament)

The European Parliament is protesting a proposal to cut structural funds for deficit-ridden Portugal and Spain, but the European Commission says that rules are rules and that the funds must be suspended.

Jyrki Katainen, in charge of job creation for the EU commission, said they would be unlocked as soon as Portugal and Spain brought their budgets in line with EU recommendations. He said that model would make the harm ”minimal”.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

Portugal and Spain were found earlier this year to be breaking EU budget rules, with deficits above the 3-percent limit.

The EU executive has the option of punishing underperformers with fines of up to 0.2 percent of GDP and the suspension of commitments or payments from structural funds up to 0.5 percent.

In the end, the commission suggested scrapping fines in exchange for the countries’ commitment to new fiscal targets.

Portugal is due to reach the 3 percent limit by the end of this year, down from 4.4 percent of GDP in 2015.

Spain was given until 2018 to bring its budget deficit in line with the 3 percent limit. The shortfall amounted to 5.1 percent in 2015.

The parliament’s regional development (Regi) and economic affairs (Econ) committees discussed the matter with Katainen and his colleague Corina Cretu, in charge of regional policy, on Monday (3 October).

MEPs across the political spectrum called the idea of suspending funds ”absurd", ”bureaucratic", ”counterproductive", "disproportionate and punitive”, ”unjust, dangerous and stupid”, and ”kafkaesque” in Monday’s hearing.

Franz Kafka was a Czech writer who wrote about the absurdity of bureaucracy.

Katainen said it was a question of following the rules. He reminded MEPs they had once put the rules in place with more than 500 votes in favour.

The EU executive will decide on the structural funds after Lisbon and Madrid present their budgets for next year, outlining commitments to reduce their budget deficits. They are due to do so before 15 October.

MEPs have only a consultative role in the commission's decision to suspend funds.

No country has ever been fined for breaking the EU growth and stability pact.

Portugal held up as symbol of EU recovery

Portugal to sail out of troubled waters after eight years of financial crisis, EU commission predicted, amid broad but "fragile" recovery in European economy.

Spain's Socialists ease Rajoy's path to power

The Socialists agree to abstain in a confidence vote later this week, meaning conservative leader Mariano Rajoy should be able to form a minority government after 10 months of deadlock.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Interview

EU Africa envoy: Europe needs to look beyond migration

Europe's obsession with migration from Africa means it risks losing out the continent's potential when it comes to trade, says the EU's ambassador to the African Union, Ranier Sabatucci. "Africa is a growing continent, it is the future," he says.

EU agrees 2020 budget deal

EU governments and the parliament agreed in marathon talks ino next year's budget - which will boost spending on climate, border protection, and the European satellite system. It will also be a benchmark if there is no long-term budget deal.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. Migrants paying to get detained in Libyan centres
  2. Searching for solidarity in EU asylum policy
  3. Will Michel lead on lobbying transparency at Council?
  4. Blood from stone: What did British PR firm do for Malta?
  5. EU Commission defends Eurobarometer methodology
  6. Timmermans warns on cost of inaction on climate
  7. Development to fuel change
  8. Does EU have role in stopping backsliding in Georgia?

Join EUobserver

Support quality EU news

Join us