Image: picture-alliance/dpa/M. Kappeler
The European Commission plans to give governments greater flexibility to increase spending on electric vehicle subsidies and transport infrastructure, including cycling lanes and train stations.
The EU executive circulated the document to deputy finance ministers, outlining which green investments it will exempt from its rules for public spending. The extra flexibility, announced in June, is designed to give indebted countries, such as Italy and Spain, more fiscal breathing space to cushion higher fuel costs from the war in the Middle East, News.Az reports, citing Politico.
The waiver is limited to green investments worth 0.6 percent of economic output over three years until 2028, but governments cannot spend more than 0.3 percent of GDP over a single year.
The Commission’s note stressed that the added flexibility is limited to measures introduced after the conflict in Iran began on February 28 that “accelerate the transition away from fossil fuels.”
The nine-page document listed the types of investments that qualify for the waiver, such as subsidies for electric vehicles, geothermal and solar energy, and replacing gas boilers with heat pumps. Other investments include railway infrastructure, trams, subway systems, cycling lanes, and charging points for electric vehicles.
Reductions in excise taxes and subsidies for fossil fuels will not qualify for the waiver. That said, the Commission’s note said Brussels will evaluate other requests submitted before mid-August for flexibility on a case-by-case basis — fueling concerns that some countries will try to bend the rules further.
“Member States will need to provide to the Commission sufficient evidence that the energy measures for which they invoke the flexibility fulfil the eligibility criteria,” the note said.
A group of critical countries — including France, Estonia, Finland and the Netherlands — criticized the fiscal waiver during a closed-door discussion of eurozone finance ministers in Luxembourg last month.