This debate formed part of the “structured dialogue” preceding the EU Commission’s proposal on a possible suspension of EU structural funding for these two countries.

Mr de Guindos said that Spain is committed to putting an end to its excessive deficit and is “an example of a country that can return to growth in the monetary union”. He argued that suspending its EU structural funding would be “inconsistent and counterproductive”, would create an “unnecessary stigma” and would “strike out the morale of the Spanish people.”

Mr Centeno welcomed the enhanced role that the “structured dialogue” procedure gives to the European Parliament. He too said that “there is no political or economic reason to suspend funds for Portugal and Spain”, as “many of the results of the efforts made by the two countries have yet to appear. “The funds are fundamental to support structural reforms”, and suspending them “would only harm the creation of new jobs, undermine investments and alienate people from the European project”.

Members of both committees agreed the EU Commission should propose a 0% suspension, so as not to harm the two countries’ economies. This echoed the view, stated by MEPs in a 3 October debate with Commission Vice-President Katainen and Commissioner Corina Creţu in Strasbourg, where they warned that suspending EU structural funding for Spain and Portugal would be counter-productive, because it would harm their most vulnerable citizens and regions.

You can re-watch the debate here.

Next steps

The coordinators and the bureaus of both committees will hold a joint meeting tonight to discuss their recommendation to the Conference of Presidents.

Background information

On 12 July, the Council decided that Spain and Portugal had failed to take effective action in response to its recommendations on measures to correct their excessive deficits, as required by the EU Stability and Growth Pact, and thus triggered the “excessive deficit” procedure for these two countries.

Parliament initiated the “Structured dialogue” procedure under Article 23 of the Common Provisions Regulation (CPR) and held a joint hearing, organised by the Economic Affairs and Regional Development committees, with Commission Vice-President Katainen and Commissioner Corina Creţu on 3 October in Strasbourg.