The EU and Hermes Study Centre Endorse Cyprus’ Compromise on Tobacco Excise Duty Revision
Brussels, 7 May 2026 – Hermes – European Study Centre fully endorses the compromise text crafted by the Cypriot Presidency of the Council of the European Union for revising Directive 2011/64/EU, known as the Tobacco Excise Directive (TED). Hermes sees this text as a solid foundation for a strategic reform at the European level.
Hermes – European Study Centre highlights the critical issues present in the European Commission’s original 2025 proposal, which, despite its commendable public health objectives, adopted a centralised approach with rapid and substantial tax increases across multiple product categories.
In contrast, the Cypriot Presidency’s compromise offers a pragmatic, consensus-oriented response among Member States, aligning European harmonisation with economic sustainability. Key features include gradual tax increases, longer transitional periods, a cap on automatic inflation-related adjustments, and clearer differentiation between categories of nicotine-containing products.
“The compromise from the Cypriot presidency strikes a necessary balance, avoiding ideological methods and favouring practical and sustainable European tax policy,” stated Giovanni Kessler, Chairman of the Scientific Committee of Hermes. “It demonstrates that Europe can implement effective solutions without risking economic stability or social cohesion.”
Giuseppe Tanga, Director of Hermes – European Study Centre, added, “This text introduces predictability and gradualism, ensuring a stable regulatory environment conducive to investment. This balanced approach allows for the pursuit of public health objectives while protecting production chains and minimizing market distortions, including illegal activities.”
Hermes emphasizes the risk of abrupt fiscal measures causing distortions in the real economy by impacting demand, production chains, and employment. The regulated tobacco sector remains a crucial part of many European economies.
Attention is also directed towards the strategic role of tax revenues in supporting the EU’s common priorities, such as bolstering defence capabilities and strategic autonomy, through stable and predictable resources.
Hermes – European Study Centre urges Member States to acknowledge this balance and work towards a concrete and sustainable agreement.
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