PM rules out banking crisis, slams timid EC electricity market proposal
"The proposal that the European Commission presented for the reform of the electricity market is very timid," argued António Costa.
Portugal’s prime minister on Wednesday ruled out the risks of contagion to Portugal from a banking crisis, stressing that no national bank is under investigation, and criticised the timidity of the European Commission’s recent proposal on the electricity market.
These positions were conveyed by António Costa at a press conference at the end of the 34th Portuguese-Spanish Summit, in Lanzarote, in the Canary Islands archipelago, with the leader of Spain’s executive, Pedro Sánchez at his side, on which occasion he cited the conclusion of the European Union’s finance ministers on European banking “stability”.
“In the specific case of Portugal, a few weeks ago the European Commission closed the last remaining investigation [Novo Banco] on a bank that had been subject to resolution and has now completed its restructuring process and is in good condition,” the Portuguese prime minister said.
Then, the leader of the executive spoke about the evolution of energy costs, saying that the Iberian solution to unbundle electricity from gas “has allowed there to be inflation at the energy level” in Portugal and Spain “much lower” than general inflation.
“It is no longer the cost of energy that is fuelling inflation, but other causes, which need to be analysed. It is necessary to see cause by cause how best to respond to it”, he said, after being asked about the existence of speculation in the way food prices are being set.
On this point, he argued that if the same strong regulatory framework had existed for various sectors as applies to energy, “surely inflation today would be more under control than it is”.
If António Costa did not elaborate on the issue of the evolution of food prices in Portugal, he did not do the same in relation to the European Commission’s proposal, which was made public on Tuesday, on the electricity market.
“The proposal that the European Commission presented for the reform of the electricity market is very timid,” he argued.
According to the Portuguese prime minister, this proposal “presents some positive steps, in a good sense, but falls far short of what is needed”.
“What is needed is what Spain and Portugal have been advocating since March last year, in the sense of separating the electricity and gas markets once and for all, ending the marginalist rule of fixing the price of electricity at the highest price of its production source,” he said.
In short, António Costa reiterated that fixing the price of electricity should be in accordance with the effective cost of its form of production.
During the press conference, the prime minister was asked if the Portuguese-Spanish Summit had addressed the issue of TAP’s privatisation process and the possibility of the group of which Iberia is part being a potential buyer of the national air carrier.
In his reply, António Costa said that in Lanzarote, over the course of two days, the two governments had not failed to analyse issues relating to “land mobility”.
Over several minutes, the prime minister listed a number of rail and road construction projects underway to strengthen communication routes between Portugal and Spain.