SPAIN and Portugal will not be charged by the EU for missing their deficit targets.
EU governments had been divided over whether or not to punish Madrid and Lisbon after they both repeatedly missed targets, with some arguing letting them off the hook would undermine the institution’s credibility.
Leaders had until August 8 to object the proposal to award the countries clemency.
Governments chose to give the countries extra time, mindful that imposing fines on states where anti-austerity sentiment is already running high could lead to a damaging political fallout, particularly in a post-Brexit Europe.
The final decision rested with the 28 member states in the European Council, where countries including France and Italy argued they should be cut more slack as they try to get their economies back on track.
Germany championed fining the pair as the only way forward, saying that sound public finances are the only foundation for growth.
Madrid must now find savings equivalent to 0.5% of GDP to bring the deficit down to 4.6% this year, and then to 3.1% in 2017 and 2.2% in 2018.