Portugal and Spain face the prospect of fines for failing to meet European Union budget rules.

At a meeting in Brussels, finance ministers from the 28-country EU agreed that both countries haven't taken "effective action" to get their borrowing down to prescribed levels.

Under EU rules, countries have to get their budget deficits down below 3 percent of their annual gross domestic product.

The decision will trigger sanctions under the "excessive deficit procedure."

The European Commission now has 20 days to recommend the imposition of fines that could amount to 0.2 percent of each country's GDP. However, both countries can submit "reasoned requests" within 10 days for a reduction of the fines.

Valdis Dombrovskis, the European Commissioner for the Euro, said Tuesday that it's possible the fines could be scrapped.