The ministers of Economy and Finance of the eurozone have promised this Monday to limit assistance for consumers and companies who are low income or fragile during 2023, while they’ve been summoned to consider other measures. These could include a two-tier model, as well as models that achieve similar outcomes given the different circumstances in each country. The ministers will consider national characteristics and make sure aid is given appropriately.
The European Commission has received confirmation from the Europol Executive Committee that they will be phasing out widespread and indiscriminate measures as energy price pressures subside. This means that many of the provisions currently in force will expire at early next year.
The Spanish Government created a 20-cent fuel bonus program which was put in place over the winter. As many people take advantage of the system though, it could become limited and go on to benefit only those who need it most.
The Government of Spain has already advanced plans to limit certain measures that affect the country’s financial stability, before meeting with eurozone counterparts. Among these actions will be an aid for fuels to help transition from an initial phase of shock caused by general policies to a more targeted one that takes into account vulnerable areas.
As proposed by the new ministers, they are studying a two-tier energy pricing model which allows companies and households to opt-in. The plan would have subsidized energy services that increase energy costs once the estimated competition is met.
The report’s recommendations were put into two categories, measures regarding energy consumption, and measures that provide incentives to reduce the country’s dependence on fossil fuels. They also provide support for drivers of decarbonization such as incentives to invest in efficiency, renewable technologies, and a transition towards a low-carbon economy.
They have committed to continue coordinating their fiscal policy response in relation to energy support in the euro area and to continue discussing a common approach for households in future meetings. They are looking into appropriate reductions of support in the future, which will include reflection on what has worked – including current policy coordination.
