No “absolute red lines”, but with reservations about EU revenue

“ Nwe don't have absolute red lines. We have reservations in some own resources, but natural reserves and that, in negotiation, may even be mitigated or resolved,” said the governor, in an interview with Lusa, in the margins of the informal meeting of Economic and Financial Affairs Ministers (Ecofin) in Dublin.

According to the minister, Portugal “does not reject any own resource at the outset” in the Multiannual Financial Framework (MFF) for 2028-2034.

This is the negotiation of the EU's next long-term budget, proposed by the European Commission at about two billion euros for 2028 to 2034, in a debate that will be held by the countries mainly this semester with a view to an agreement by the end of the year.

Among the proposals to increase European revenue are new own resources, such as a portion of the excise duty on tobacco, revenue associated with trading in emission allowances and the border carbon adjustment mechanism, a contribution on electronic waste not collected and an annual contribution from large companies.

Portugal has reservations about the configuration of some of these mechanisms, but the Minister stressed that there is no rejection of principle: “The reservations we have are not specific to a own resource, [...] we have more technical and detailed questions about own resources.”.

In the case of tobacco, Portugal has already expressed reservations in the context of the revision of taxation of the sector, with the possibility of a part of the revenue of excise duty reverting to the Community budget being discussed.

On the other hand, the government is “very favourable” to the taxation of large digital platforms and to the recovery of the discussion on a tax on financial transactions, Lusa was told by the person responsible.

Miranda Sarmento argued that negotiations must be ambitious and balanced, ensuring that support for agriculture and cohesion is maintained, strengthening competitiveness and maintaining support for Ukraine.

For the minister, the strengthening of EU revenue should be accompanied by other solutions to address European financial needs, including the postponement of repayment of borrowings under the European recovery fund created after the pandemic, which financed Recovery and Resilience Plans, and the issuance of joint debt to finance large European projects, such as in the areas of competitiveness and defence.

Negotiations are ongoing and should be extended in the coming months, with the European Council and the European Parliament seeking political agreement by the end of the year to allow the adoption of legislation by 2027 and the entry into force of the new financial framework by January 2028.

At the moment, another debate is emerging in the EU on the possibility of using frozen Russian assets to support Ukraine, an issue involving more than EUR 200 billion and raising legal and economic doubts between Member States.

Joaquim Miranda Sarmento stated that Portugal rejects a solution for frozen Russian assets involving its confiscation or an equivalent measure, considering that this could affect the international credibility of the euro.

“There is a line that we cannot overcome over the penalty of destroying the credibility of the euro to successive investors,” he said, indicating that “more than legal fears, there are above all economic fears, because coins work while they have credibility.”.

The Minister argued that a solution should be found to use the assets to support Ukraine without calling into question the rights of its owners in the future, to which the EU has “not yet been able” to arrive.