The matter now goes to the European Union Council of Ministers, with EU member states' economic and finance ministers meeting as Ecofin, including Portugal's own Mário Centeno. It is Ecofin that is to decide what action to take.

At a meeting in Brussels, the EU executive adopted written recommendations that stress that the two Iberian member states “will need new deadlines [by which] to correct their excessive deficits” - which in Portugal's case was previously 2015 and in Spain's 2016. They had not, it noted, made sufficient efforts to keep their deficits to the limits established.

The next Ecofin meeting is on Tuesday. If they decide to press ahead with sanctions under the excessive deficit procedures the commission “has the legal obligation to present, within 20 days, a proposal of the fine to apply”, it noted.

“In respect of the fine, in particular, the Commission could recommend to the Council the reduction of its amount or even its total cancellation" the commission said in a statement. "That could happen either invoking exceptional economic circumstances, or in the wake of a well-rounded request presented by the member state in question, which must be sent to the Commission within 10 days from the adoption by the Council of its decision."

On the other hand, the Commission “should equally propose a suspension on the part of authorisations under the Union's European Structural and Investments Funds,” it noted.

The deadlines for Portugal and Spain to reduce their deficit to 3% of gross domestic product were set back in 2013.

On Portugal, the nominal deficit “reduced from 11.2% of GDP in 2010 to 4.4% in 2015, while the goal recommended for 2015 was 2.5% of GDP," the commission notes. "The cumulative structural budget effort during the 2013-2015 period is estimated at 1.1% of GDP, which is significantly lower than the 2.5% of GDP recommended by the Council."

Meanwhile, “after reaching a peak of 130.2% of GDP in 2014, public debt remained high, at 129.0% of GDP in 2015”.