The European Commission recommends that Portugal “reduce energy support measures” and direct these funds to “deficit reduction”. If there are “new price increases” that require support measures, they should target “the most vulnerable households and businesses”, and also serve as an “incentive to save energy”.
The guidance is part of the package of specific recommendations to Member States presented in Brussels this Wednesday.
“Caution” is one of the features of this package of recommendations. Brussels recommends limits on net primary expenditure, which should not exceed 1.8%.
On the other hand, it is recommended that Portugal maintain public investment financed by the Recovery and Resilience Fund and ensure that the funds are absorbed.
To this end, Portugal needs to “accelerate” the implementation of the recovery and resilience plan, ensuring “adequate administrative capacity”.
Portugal should “reduce dependence on fossil fuels” and “further accelerate the deployment of renewables”, to simplify the bureaucracy of “wind energy production” projects. But also to promote the production of energy by the users themselves.
Brussels recommends “increasing electrical interconnection capacity” and modernizing “distribution and storage” of electricity.
Among the recommendationsBrussels believes that the government should “promote private investment” for the energy sector and provide “political measures” to attract and train “necessary skills for the green transition”.
In the European Semester policy package, this year’s assessment reflects the outlook for improvement as presented in the Spring Macroeconomic Bulletin.
The commission admits that, if the “trends” continue next year, it may consider Portugal presenting balanced accounts and thus exit the situation the country is still in in 2023.
The European Commission concludes that the Portuguese economy continues to show “imbalances”, but “vulnerabilities are diminishing”, both for Portugal and for Germany, France and Spain.
Brussels puts Portugal on this shortlist of four countries, admitting that if “trends” continue next year, “this 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 selected for in-depth reviews in the 2023 Alert Mechanism Report.
A specific warning for Hungary is that “risks are on the downside and imbalances could become excessive (…) if urgent action is not taken”.
Brussels points out that Cyprus has emerged from a situation of excessive imbalances, but is still weak in terms of public and private debt: which, despite decreasing globally, “remain a cause for concern”.
Greece and Italy continue to suffer from excessive imbalances, but Brussels believes that “weaknesses seem to be diminishing” due to recent measures.
The most significant improvements have been registered in the cases of Germany, Spain, France and Portugal, with the commission admitting that it can conclude in the “next year that there are no imbalances”, for the four countries.
Source: DN
