BERLIN: Germany’s central bank chief Thursday blasted the European Commission for failing to impose a fine on Spain and Portugal over their overly high deficits.

“At some point, infractions against the rules have to have consequences. In my opinion, the Commission and the European Council aren’t consistent enough,” Bundesbank (central bank) president Jens Weidmann told German weekly Die Zeit and Italian daily Corriere della Sera.

Commissioners agreed in July to allow both Madrid and Lisbon to dodge a fine that is supposed to be imposed on member states that exceed a budget deficit ceiling of 3.0 per cent of GDP.

The path for the fine to be waived was cleared when German finance minister Wolfgang Schaeuble – widely known as a stickler for fiscal rules – abandoned his insistence on punishing the Iberian nations.

Brussels justified the decision by declaring that Spain and Portugal had made considerable efforts to reduce their deficits as they recover from the financial crisis.

But Weidmann complained that the decision turned the rules into “a fair-weather event with no binding power”, arguing that clear rules would improve public understanding of the EU’s actions.

Published in Dawn, August 5th, 2016