Portugal’s Tax Appeals Stall

A dispute with the Portuguese tax authorities now takes, on average, 861 days to work its way through an administrative court. The courts are clearing just 48 per cent of the cases arriving each year, which means the queue is not being managed down. It is getting longer (Executive Digest, Commission). The European Commission put the deterioration on the record in its 2026 Rule of Law Report, published on 17 July.

The same report raised a different, but related, concern: whether Portugal’s state news agency Lusa still has enough independence from the government that now owns and controls it. Taken together, the two findings show the awkward centre of EU rule-of-law oversight. Brussels can spot institutional decline. It can only force change when some separate piece of EU law gives it a lever.

Two-Year Waits and Who They Protect

Administrative and tax courts sit at the point where the citizen meets the state: tax bills, licensing decisions, public contracts. When those courts take more than two years to decide a case, and clear fewer than half the files coming in, the state’s decision often becomes the practical reality long before a judge gets to test it. That suits governments and tax authorities whose rulings remain in force while those challenging them wait.

Portugal is not an outlier in the south of Europe. The Commission said Italy’s proceedings remain "among the longest in the EU" (Euronews Italia). Spain was criticised over excessive delays in high-level corruption cases (elDiario.es). Greece was credited with only limited progress on corruption prosecutions (gr.euronews).

The annual report examines justice systems, anti-corruption, media freedom and institutional checks across all 27 member states. For smaller countries, including Ireland, that common framework matters: it stops rule-of-law scrutiny being treated as something reserved for the usual suspects. But the report itself is a record and a source of pressure. It does not, on its own, trigger sanctions, funding cuts or court proceedings.

Lusa and the One Law That Might Bite

The Lusa case comes closer to a part of EU law with teeth. After private shareholders withdrew from the agency, the Portuguese state filled the gap and now controls 100 per cent of its capital. New statutes approved in January 2026 gave the government power to appoint board directors and placed political representatives on an expanded advisory council (CMPF).

Lusa journalists objected, warning that the structure allowed government appointees to influence editorial decisions. The Portuguese Journalists’ Union then filed a formal complaint in Brussels. It said the statutes breach the European Media Freedom Act, the EU’s 2024 regulation requiring editorial independence for public-service media providers, particularly its rules on independent governance and protection from political interference (NUNS, Regulation 2024/1083).

A complaint is not a ruling. The Commission has not found Portugal in breach. But the European Media Freedom Act gives Brussels something the annual rule-of-law report does not: a concrete legal basis. If the statutes breach binding EU media-freedom rules, the Commission can open infringement proceedings under Article 258 TFEU, the route used to bring a member state before the Court of Justice for breaking EU law.

The Political Cover Game

Hungary’s government was quick to turn the report’s breadth to its advantage. Minister János Bóka presented the findings as proof that rule-of-law problems exist across the EU, rather than being concentrated in Budapest (Origo, a government-aligned outlet). Independent Hungarian media made the obvious distinction: Hungary’s position is materially different because EU funding is already frozen under separate budget-protection rules and recovery-fund milestones, both of which carry real financial consequences (HVG, Regulation 2020/2092).

That distinction matters. The conditionality regulation allows the EU to withhold money where rule-of-law failures threaten EU spending. The annual report, by contrast, is a diagnostic exercise. Governments under harder pressure have every reason to blur the line between soft recommendations and frozen funds. It may work politically. Legally, it changes nothing.

Where Oversight Becomes Paperwork

Portugal’s case shows the EU system as it actually operates. The Commission can identify a court system resolving fewer than half of its incoming cases. It can record that a state news agency’s governance alarms the journalists working inside it. It can publish those findings across 27 member states and give domestic reformers a common point of reference.

What it cannot do, without a treaty breach, a budget trigger or a media-law violation, is force Lisbon to act. The Lusa complaint now rests with the Commission’s legal services: does it justify an infringement case? If it does, the annual report may have been an early marker on the way to a binding judgment. If it does not, Portugal joins the longer list of member states where Brussels can describe institutional decay with some precision, publish the diagnosis each year, and watch the problem continue. That is where EU rule-of-law oversight stops being power and becomes paperwork.