June 15 (Reuters) - Spain's and Portugal's fiscal tightening plans this year and next are appropriately ambitious, the European Commission said, as it approved progress in fiscal consolidation also in 10 other European Union countries.
The EU executive on Tuesday also started disciplinary steps against three more countries -- Cyprus, Denmark and Finland -- for an expected breach of the EU limit on budget deficits of 3 percent of gross domestic product.
The Commission proposed that Finland bring its deficit back below 3 percent next year, Cyprus in 2012 and Denmark in 2013.
Of the EU's 27 members, only Luxembourg and Bulgaria are now not in breach of the bloc's budget rules.
The Commission assessed the progress of fiscal consolidation in Belgium, the Czech Republic, Germany, Ireland, Spain, France, Italy, the Netherlands, Austria, Portugal, Slovenia and Slovakia, as required by EU finance ministers.
In all cases we conclude that the measures taken were sufficient to achieve the 2010 targets and, in most cases, there is an invitation to specify as soon as possible measures to substantiate the targets for the years beyond 2010, the Commission said in a statement.
On Spain and Portugal, the Commission said:
The conclusion is that in both cases, the targets are appropriately ambitious and imply substantial fiscal consolidation.
Spain and Portugal are expected to specify measures in their 2011 budgets amounting to 1.75 and 1.5 of GDP respectively in order to attain the new targets, it said.
This assessment should be considered as early guidance for next year's budget. Overall, the current budgetary targets, including recent revisions appear to ensure an appropriate fiscal stance globally, it said.
Under pressure from markets, where the cost of borrowing has been rising sharply for Madrid and Lisbon, Spain announced on May 12 additional deficit-cutting steps under which it aims to bring the budget shortfall to 9.3 percent of GDP this year and to 6 percent in 2011 from 11.2 percent in 2009.
Portugal announced on May 8 additional deficit-reduction measures that aim to curb the shortfall to 7.3 percent of GDP this year, rather than the previously planned 8.3 percent, from 9.4 percent in 2009.
For 2011, Portugal plans to reduce the deficit to 4.6 percent. (Additional reporting by Judy McInnes in Madrid and Andrei Khalip in Lisbon, editing by Dale Hudson)