The official pointed out that the measures adopted in the country and throughout the European Union (EU) to respond to the economic impacts of the war in Iran must be “temporary and targeted, to be more efficient and also to mitigate the fiscal impact.”
The European Commissioner for Economy defended this Thursday that Portugal may have “some room for maneuver” to deal with the crisis caused by the conflict in the Middle East, but admitted impacts on fuel prices and purchasing power.
“With regard specifically to Portugal, the country has, in general, a solid budgetary position, having even recorded a budget surplus last year. Therefore, there may be some room for maneuver”, said Valdis Dombrovskis, at a hearing of the European Parliament’s Economic and Monetary Affairs committee, in Brussels.
Still, the official pointed out that the measures adopted in the country and throughout the European Union (EU) to respond to the economic impacts of the war in Iran must be “temporary and targeted, to be more efficient and also to mitigate the fiscal impact”.
Valdis Dombrovskis admitted that “the first channel through which the energy crisis or supply disruptions are felt is through energy and, not least, fuel prices, and then these impacts spread to the wider economy”.
“And, obviously, whenever we face a period of high inflation, this has a negative effect on purchasing power”, so it is “important that we address and also manage to reduce inflation as quickly as possible”, he appealed, speaking of measures such as reducing taxation.
The European Commissioner for Economy was responding to the blockade MEP, Catarina Martins, who in her intervention pointed out that “the cost of living reached a record this week” as “the basket of essential products in Portugal has never been so expensive” and that “there are people who truly cannot put fuel in their car”.
A scenario analysis carried out by the European Commission shows that, given a short duration of the energy crisis, EU growth could be 0.2 to 0.4 percentage points below what was predicted in the autumn economic forecasts, released last November.
In turn, inflation could rise by up to one percentage point.
If the interruptions in energy supply are more prolonged or severe, the impact will be greater, according to Brussels, which predicts that growth could decline by 0.4 to 0.6 percentage points, and inflation could increase by between 1.1 and 1.5 percentage points, both in 2026 and 2027.
