The European Commission on Wednesday held back from slapping fines on Spain and Portugal for running high deficits, in what would have been a landmark move by the EU to impose its budget rules.

"The college (of the EU's 28 commissioners) agreed today on the cancellation of fines for both countries" Valdis Dombrovskis, the commission vice president for the euro, said in a news briefing.

Under bloc rules, the EU executive could have imposed fines of up to 0.2 percent of national gross domestic product (GDP) against Madrid and Lisbon -- but instead showed clemency amid growing anti-Brussels sentiment highlight by Britain's Brexit vote.