“Regarding this support package, as far as we know, most of the financing is expected to be channeled through credit lines from the national Development Bank, and the duration of the package is expected to extend,” stated European Commissioner for Economy, Valdis Dombrovskis, during an interview in Brussels.
On the day the European Commission presented its spring economic forecasts, affected by the impact of U.S. tariff announcements against the European Union (EU), Valdis Dombrovskis responded to questions about the Portuguese 10 billion euro package aimed at supporting exporting companies through credit lines, insurance, and expanded internationalization support.
“There is a certain portion of grants, as we understand, around 400 million euros,” he noted.
Nevertheless, “our spring forecast does not take this package into account,” Valdis Dombrovskis indicated.
He urged, “We need a more detailed financial commitment. We must ensure that we have a solid financial commitment regarding specific measures and the implementation timeline; all this must be specified.”
Joaquim Miranda Sarmento, former Minister of Finance, had already assured in an interview that this 10 billion euro plan to support Portuguese exporting companies in light of the U.S. tariffs “practically has no budgetary impact,” although 200 million may be converted into grants.
In the spring forecasts released today, the European Commission significantly revised down the eurozone’s economic growth forecast for this year, from 1.3% to 0.9%, predicting that the Gross Domestic Product (GDP) would be affected by U.S. tariffs and trade uncertainty.
For Portugal, the EU executive revised down its growth forecast for the Portuguese economy this year, to 1.8%.
Brussels also warned of GDP contraction and inflationary pressures due to the announced U.S. tariffs, noting a U.S. average tariff rate higher than in the 1930s.
These macroeconomic forecasts by the European Commission were influenced by U.S. protectionist policies, with announcements—such as 25% tariffs on steel, aluminum, and European cars, and 20% reciprocal tariffs to the community bloc—causing instability in financial markets and fears of economic slowdown and persistent inflation.
This instability is occurring while the EU attempts to invest more in defense due to geopolitical tensions.
The institution estimated today that the increase in EU defense spending to 1.5% would increase GDP by about 0.5% by 2028.
At the end of April, Portugal formally requested the European Commission to activate a clause allowing part of defense investment to be exempt from compliance with budgetary rules.
Commenting on this request, Valdis Dombrovskis stated that “this national safeguard clause allows all countries, including Portugal, to deviate from their medium-term structural budget plan with an increase in defense spending.”
However, “we will always have to balance budgetary considerations with the need to increase defense spending,” he warned.
