EU's Moscovici urges 'zero sanctions' for Portugal, Spain

European Commission economy chief Pierre Moscovici on Wednesday indicated he wants to see eurozone deficit miscreants Spain and Portugal escape sanctions.

The EU on Tuesday threatened both countries with swingeing fines for failing to fix years of high deficits, although Brussels has previously avoided wielding its disciplinary powers for budgetary overshooting.

"I hope we shall be capable of going towards zero sanctions once Spain and Portugal give us good guarantees" that they are trying to bring spending into line, Moscovici told Europe 1 radio.

The European Commission, the EU's executive arm, has 20 days to decide on sanctions after eurozone finance ministers found Lisbon and Madrid had not taken "effective action" to bring down their deficits.

Both countries, who now must lobby the EU to plead their case, could face fines of up to 0.2 percent of GDP -- nearly 2.2 billion euros ($2.4 billion) in Spain's case and 360 million euros for Portugal based on 2015 data under an "excessive deficit procedure."

Both countries have been battling to rein in spending, having been hit hard by the eurozone debt crisis.