The European Commission proposes granting Spain and Portugal one more year to bring their deficits below the EU-mandated ceiling of 3 per cent of gross domestic product, Economy Commissioner Pierre Moscovici says.
This means Lisbon would have to meet the target this year, rather than in 2015, while Madrid would have until 2017 to whittle down its deficit. The decision requires the approval of EU member states.
Efforts to meet the revised targets must continue at a "strong pace," Moscovici says.
He also defends the decision to delay any further action against the two deficit offenders until July, noting that "this is not the right moment economically or politically to take this step."