Eurozone: Important decision regarding Spain and/or Portugal this week - BBH

Research Team at BBH, suggests that there is a key decision this week which will be made by the Eurozone finance ministers. 

Key Quotes

“They will decide if Spain and/or Portugal should be sanctioned for the excessive deficits the EU judged. 

The sanctions could include fines and the suspension of some regional funds.  If the rules are not enforced, they lose credibility.  If they are enforced, it appears discretionary and selective.  Consider that despite repeated violations and expressions of concern, the German external imbalance has not been addressed.  In the European political theatre, it might be best to sanction Spain and Portugal, and then suspend the judgment when the countries appeal under "exceptional circumstances" and make a "reasonable request."