Brussels, Nov. 27, 2024 (Lusa) - The European Commission on Wednesday insisted that the government backtrack on the Petroleum and Energy Products Tax benefit, a request it will oversee, after finding that the State Budget for 2025 is not in line.
"The Commission's opinion on Portugal's draft budget plan for 2025 is that, on the whole, it is not fully in line with the Council's budgetary guidelines," which is why “we invite the Portuguese authorities to take additional and necessary measures to reduce emergency energy support measures fully,” an official source from the institution told Lusa.
One day after the EU government issued warnings about the 2025 State Budget concerning fuel support, namely concerning reductions in the Tax on Petroleum and Energy Products (ISP), the European Commission warns that it will, "together with the Member States, supervise the political response to the opinions issued yesterday [Tuesday] within the framework of the European Semester".
This warning also comes after the finance minister, Joaquim Miranda Sarmento, announced that "at the moment, there is no intention of changing this ISP benefit".
On Tuesday, the European Commission announced that the SB2025 proposal "is not fully in line" with the European Union's (EU) recommendations as it continues to provide for reductions in ISP, only unfreezing the carbon tax.
Precisely, it is estimated that these emergency supports from the Portuguese state that are still in force, namely the general reduction in the ISP, will weigh 0.5% of the Gross Domestic Product (GDP) in 2024 and 0.1% of the GDP in 2025, according to calculations by Brussels, for whom "this figure is not in line with that recommended by the Council".
In an interview with Lusa and other international media on Tuesday, the European Commission's government vice-president Valdis Dombrovskis emphasised: "As far as next year's budget plan is concerned, Portugal is projecting a growth in net expenditure, but that's not a problem, the issue is that we have been recommending - and the Council has been endorsing this recommendation - that member states should progressively withdraw the emergency energy support measures that were introduced following Russia's aggression in Ukraine and the increases in energy prices."
On the day he presented Brussels' assessment of the 2025 budget, submitted by Lisbon in mid-October, the official explained that “this [support related to the energy crisis] must now be eliminated”.
"That was why the plan was not considered fully in line with the budget guideline," Valdis Dombrovskis told Lusa and other international media.
As EU rules dictate, the Portuguese government sent its draft budget for next year to the EU government a month and a half after the institution released its assessment of the document, while the 2025 budget proposal is being discussed in specialised sessions.
Every year, the euro countries submit draft budget plans to the European Commission, which are then assessed as part of the EU's public policy monitoring and coordination process, the European Semester.
When it sent its document to Brussels in mid-October, Lisbon promised "budgetary responsibility" while maintaining a surplus and a "sustained reduction" in public debt.
The final overall vote on the budget proposal is scheduled for Friday.
ANE/ADB // ADB.
Lusa
