In its annual report published today, the European Central Bank shows itself to be distinctly ‘sniffy’ over Portugal’s lucky sanctions escape for failing to keep to budgetary guidelines in 2015.
According to Britain’s Express, “Spain and Portugal shouldn’t have been let off the hook” as the strict European ‘economy rules’ are there for a reason: to prevent a financial crisis.
But as Brussels was able to appreciate at the time, ‘fining’ a country that was struggling to extricate itself from negative growth against a backdrop of “anti-euro sentiment” would almost certainly have been counter-productive.
At least that’s the point that prime minister António Costa, aided by President Marcelo, managed to hammer home last summer.
Now however is the moment for the institution led by Mario Draghi to show how it feels about it – and the photo carried by the Express of a sour-faced Draghi says it all.
The paper writes that the ECB’s annual report “hinted that failing to punish the countries undermined the rules” – and stressed that the rules “should have meant automatic penalties that amount to around 0.2% of GDP for each state”.
The report continued: “Countries need to ensure strict compliance with the provisions of the Stability and Growth Pact and a timely correction of debt sustainability risks”.
Happily for Spain and Portugal, the ECB’s knuckle-rapping is essentially ‘academic’, but the writing is on the wall that the institution is not amused by EU leaders’ decision to bend economic rules for political capital.