BRUSSELS has decided not to withhold funds from Spain as a sanction for the country's failure to meet its debt targets – just four months after the EU let it off a fine totalling 0.2% of the GDP for the same reason.
Although the fine, which would have been around €2 billion, was waived, Brussels was still intending to keep back 50% of EU funds from Spain until its national debt was reduced in accordance with European rules.
This would have deprived Spain of around €1.2bn in essential grants.
But the European Parliament urged Brussels not to retain the money, stressing that the Spanish government had taken 'sufficient measures' to try to repair the deficit.
Brussels has agreed, but warns that 'in the absence of major changes in economic policy', Spain is at risk of failing to comply with debt targets in 2017.
This stay of execution for Spain is likely to be only temporary, and purely due to the country's high unemployment and an already-struggling population unable to bear the burden of more taxes to cover fines or loss of funds.
Portugal has also been give the same lenient treatment, and will not be fined or lose out on funding because of its deficit.
In Spain's case, the national debt – 5% of the GDP and the highest it has been for over a century – is well above the target of 4.2% imposed by the EU.
This is largely aggravated by the fact that the GDP is reducing rather than the actual debt amount increasing, since high unemployment means less production per capita.
Economy minister Luis de Guindos stood up in European Parliament just over a week ago to fight Spain's corner, stressing that 'correction measures' approved would bring in an extra €10bn.
Read more at thinkSPAIN.com