“It is important to stay on course, both in terms of implementing medium-term budgetary structural plans and the budgetary trajectory established in the plan, as well as with respect to the implementation of the PRR,” stated European Commissioner for Economy, Valdis Dombrovskis, during an interview in Brussels.
Following the Democratic Alliance’s (AD) electoral victory in Portugal and on the day the European Commission presented its spring economic forecasts, Dombrovskis warned that all reforms and investments outlined in the PRR must be completed by August of the coming year, given the execution deadline of the end of 2026.
“We don’t have much time, so it’s obviously important to work very intensively now to ensure that all milestones and targets are met, and that countries, including Portugal, fully benefit from the PRR,” argued Valdis Dombrovskis.
The Democratic Alliance secured victory in the legislative elections with 89 elected deputies, while both the Socialists (PS) and the Chega party each secured 58 seats in parliament.
The European Commissioner’s interview took place a week after the European Council approved a revision of the PRR, which includes 108 measures aimed at replacing unattainable goals and reducing administrative burdens.
Portugal’s PRR is valued at 22.2 billion euros, consisting of 16.3 billion euros in grants and 5.9 billion euros in loans from the Recovery and Resilience Facility, encompassing 376 investments and 87 reforms.
Currently, Portugal has already received 8.49 billion euros in grants and 2.9 billion euros in loans, with the plan’s execution rate standing at 32%.
The medium-term budget plan referred to by Valdis Dombrovskis includes targets for spending, investments, and reforms, and was submitted by Lisbon to Brussels under the EU’s new budgetary rules.
In the submitted document, the government indicated that medium-term budgetary commitments represent, on average, a net expenditure growth equal to or less than 3.6% over the period 2025-2028, aligning with the reference trajectory provided by the European Commission to Portuguese authorities.
The plan also projected economic growth at 2.1% in 2025, 2.2% in 2026, 1.7% in 2027, and 1.8% in 2028.
A four-year budgetary trajectory anticipated a 12.7 percentage point drop in public debt to 83.2% of Gross Domestic Product (GDP) by 2028, averaging a reduction of 3.2 percentage points per year.
As of April 2024, the EU has implemented new community rules on deficit and public debt, maintaining the caps of 3% and 60% of GDP, respectively, following the reform of the bloc’s budgetary rules which member states will now begin to apply after drafting national plans.
