EU countries could better target measures to lower energy prices, commissioner says
Commissioner Dombrovskis Urges More Effective Energy Price Measures
Current Approaches to Energy Price Reduction
BRUSSELS, May 4 (Reuters) - European Union governments could be better at targeting the measures to lower energy prices to the most vulnerable sectors of the economy, European Economic Commissioner Valdis Dombrovskis told a press conference on Monday.
Many EU governments have adopted measures like cutting excise or VAT taxes on fuel, which lowers the price for all users rather than those who are affected the most, drawing criticism from the Commission and the International Monetary Fund.
Assessment of Targeting Effectiveness
"Our first assessment of measures taken by member states so far show that they could do better in targeting them at those who are most impacted," Dombrovskis said after a meeting of EU finance ministers.
Fiscal Constraints and Policy Recommendations
"Our room to maneuver is already more limited today on account of higher deficit and debt levels, a higher interest rate environment and the urgent need for additional defence spending," he said.
"So we simply cannot afford to repeat the mistakes of the past. It is therefore essential that any support measures are temporary, targeted and do not increase aggregate energy demand," he said.
Windfall Taxes and EU Policy Stance
National vs. EU-Level Windfall Tax Approaches
Dombrovskis added that while individual countries can impose windfall taxes on energy companies if they wish to, the Commission would not recommend such a move at the European level.
"We are not recommending any EU initiative, because the previous application of a windfall tax (during the 2022 energy crisis) produced mixed results," Dombrovskis said.
Reporting Credits
(Reporting by Makini Brice in Paris and Jan Strupczewski in Brussels; Editing by Matthew Lewis)
