The European Commission is expected to propose lower tax rates on electricity as part of a new energy “toolbox” requested by the European Council on 19 March. The announcement was made by the Commission’s Executive Vice-President for the Economy, Valdis Dombrovskis, following a meeting of the Eurogroup.
Dombrovskis said the measures under preparation aim to address rising energy costs, stressing that electricity should be taxed less than fossil fuels.
EU energy measures under preparation
Speaking after the Eurogroup teleconference, Dombrovskis highlighted the importance of reducing the tax burden on electricity compared with fossil fuels.
He also announced plans for measures aimed at improving the efficiency of electricity networks, particularly for energy-intensive industries. Other proposals include the possibility of reducing certain related charges and introducing changes to the EU Emissions Trading System (ETS).
According to Dombrovskis, several ministers also raised additional options during discussions, including tax interventions on fuel similar to measures adopted during the previous energy crisis in 2022.
The Commission, he said, is ready to work closely with member states on designing national measures, while stressing that any interventions should remain targeted and temporary.
At the same time, he noted that member states retain the ability to introduce different national measures, although “fiscal room for manoeuvre is more limited than in the past”.
Government leaves door open for further support
The Cypriot government also indicated that further financial support for households and businesses affected by the continuing Middle East crisis and heightened uncertainty remains under consideration.
Government spokesperson Konstantinos Letymbiotis said that several scenarios have been prepared given that the duration, intensity and depth of the crisis remain uncertain, as do its potential effects on energy prices and the cost of goods.
“There is a series of measures which, if necessary, will be activated,” Letymbiotis said in statements at the Presidential Palace following the meeting between the President of the Republic and the UN Secretary-General’s Special Representative in Cyprus, Colin Stewart.
He added that the Republic of Cyprus has the capacity to design targeted support measures because public finances remain strong, describing sound fiscal foundations as a key prerequisite for such interventions.
Reactions to €100 million support package
Reactions to the €100 million package of measures announced by the government have continued.
DISY President Annita Demetriou, speaking during a visit to the Famagusta district, said that the Democratic Rally had already emphasised the need for stronger support for the tourism sector.
She acknowledged the measures announced by the President but noted that they are not sufficient on their own and that continued efforts will be required.
“The tourism sector, development and our economy must be protected, and this can only be achieved through sensible and responsible policies,” Demetriou said.
The General Council of the trade union federation PEO, which met on 26 March, stated that the measures announced by the government are limited and need to be strengthened, adding that both their duration and scope should have been greater.
Meanwhile, Marios Drousiotis, President of the Cyprus Consumers Association, expressed cautious satisfaction with the measures announced on Thursday by the President of the Republic. He said, however, that clarification is still needed on whether heating oil is included in the reduction of excise duties.
With information from ANA-MPA