Empty lines are often used in programs to separate logical parts in a sequence of statements or expressions. This avoids the code to look like walls of text, which are somewhat difficult to read. This of course also applies to Algol 68, but to a much lesser degree due to the exceptionally clean syntax of the language. Therefore we favor a compact formatting to a reasonable extent.
Please be frugal with empty lines, especially within enclosed clauses.
It is not necessary nor advisable to have separated "declaration parts" in serial clauses, because declarations can appear anywhere. However empty lines may still be useful to group related declarations together.
It is often better to use an explanatory comment rather than an empty line, again especially within enclosed clauses.