The European Commission recommends that Portugal “reduce energy support measures”, allocating these funds to “deficit reduction”. In the event that “new price rises” occur that require support measures, these must be directed at “the most fragile families and companies”, also serving as an “incentive for energy savings”.
The guidance is part of the package of specific recommendations to Member States, presented this Wednesday in Brussels.
“Prudence” is one of the hallmarks of this package of recommendations. Brussels recommends limits to net primary spending, which should not exceed 1.8%.
On the other hand, it is recommended that Portugal maintain the public investment financed by the Recovery and Resilience Fund and guarantee that the funds are absorbed.
For this, Portugal must “accelerate” the implementation of the Recovery and Resilience Plan, guaranteeing an “adequate administrative capacity”.
Portugal must “reduce dependence on fossil fuels” and “further accelerate the deployment of renewable energy”, simplifying the bureaucracy of “wind energy production” projects. But also to promote energy production by the users themselves.
Brussels recommends “increasing the electrical interconnection capacity” and modernizing the “distribution and storage” of electricity.
Among the recommendations, Brussels considers that the Government must “promote private investment” in the energy sector and guarantee “political measures” to attract and train “necessary skills for the green transition.”
In the European Semester policy package, this year’s assessment reflects the prospects for improvement presented in the Spring Macroeconomic Bulletin.
The commission admits that if the “trends” continue next year, it can consider that Portugal presents balanced accounts and, in this way, get out of the situation in which the country still finds itself in 2023.
The European Commission concludes that the Portuguese economy continues to present “imbalances”, but “vulnerabilities are decreasing”, both for Portugal and for Germany, France and Spain.
Brussels places Portugal in this shortlist of four countries, admitting that if “the trends” continue next year, “it could lead to a decision on the absence of imbalances”, removing Portugal from the alert mechanism.
In the package of country-specific recommendations, “the Commission assessed the existence of macroeconomic imbalances for 17 Member States that were selected for in-depth reviews in the 2023 Alert Mechanism Report.”
A specific warning for Hungary notes that “risks are on the downside and imbalances could become excessive (…) if urgent action is not taken.”
Brussels reports that Cyprus has emerged from a situation of excessive imbalances, but maintains weaknesses in terms of public and private debt: which, despite having decreased globally, “continue to be a cause for concern.”
Greece and Italy continue to face excessive imbalances, but Brussels considers that “fragility seems to be diminishing” due to recent policy measures.
The main improvements are registered in the cases of Germany, Spain, France and Portugal, admitting the commission that in the “next year it can conclude by the” absence of imbalances “, for the four countries.
Source: TSF
