The Council of the European Union (EU) is assessing the revision of the Portuguese Recovery and Resilience Plan (RRP), submitted at the end of May with a total allocation expected to exceed €22,000 million, it was announced today.
“Today, the [EU] Council has approved the first amended RRP, with a new Repower [energy package] chapter from Estonia, and is now assessing the revised plans from Denmark, France, Ireland, Malta, Slovakia, Portugal and Spain,” announced European Commission Executive Vice-President Valdis Dombrovskis.
The decision on Estonia’s plan was taken at today’s meeting of EU finance ministers in Luxembourg. It comes three weeks after Portugal submitted to the European Commission its proposal for reprogramming its RDP, which will now exceed 22,000 million euros.
This represents an increase of more than 2.4 billion euros in grants and 3.2 billion euros in loans, compared with the initial PRR funds.
This amendment also incorporates the financial allocation for the RepowerEU initiative (€704 million), as well as the unused amount of the “Brexit” adjustment reserve (€81 million).
With the reprogramming proposal, Portugal now has 41 additional measures, 11 reforms and 30 investments, all with an implementation period up to 2026, with a view to resuming economic growth.
At today’s press conference, Valdis Dombrovskis also mentioned that the finance ministers of the 27 discussed at this Ecofin the reform of EU budget rules, which are to resume next year with the same limits for deficit and public debt, but with more flexibility.
“The member states have already agreed that we should complete the legislative process by the end of the year, and there are good reasons for meeting this deadline. Firstly, from 2024 onwards, we are abandoning the safeguard clause [which temporarily suspends budgetary rules] and so we need certainty […] and secondly, in the current context of lending rates and inflation, there is an urgent need to get public finances back on track and ensure sustainability so that inflation returns to 2%,” he listed.
In this context, Valdis Dombrovskis also stressed “the importance of maintaining the momentum of reform and investment in member states’ RRPs”.
Last April, the European Commission proposed “risk-based” budget rules when they resume in 2024, suggesting a “technical trajectory” for indebted EU countries such as Portugal, giving them more time to reduce their deficits and debt.
In force for 30 years, the Stability and Growth Pact requires member states’ public debt not to exceed 60% of GDP and imposes a deficit below the 3% threshold, but in the context of the pandemic, the safeguard clause was activated in March 2020 to allow member states to respond to the covid-19 crisis by temporarily suspending these requirements.
Against a backdrop of geopolitical tensions and market disruptions due to the war in Ukraine, the temporary suspension of SGP rules was maintained for a further year until the end of 2023, with the resumption of budgetary rules now scheduled for 2024.
Portugal is one of the most advanced countries in implementing the RRP
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