In its first plan under new EU budget rules, Portugal’s government has promised the European Commission a recovery and resilience plan with “increased implementation speed” and sustainable finances despite the “particular challenge” of reformed economic governance.
“The EU’s new economic governance framework will have decisive consequences for policymaking at the national level. Given the need to say effective integration and coordination of policies at the most diverse levels, it is necessary to maximise the economic and social impact of public funds, whether European or national and, as such, the Recovery and Resilience Plan [PRR] will continue with an increased speed of execution,” the government said in the document.
At stake is the first medium-term budget plan, with spending and investment targets and reforms, which Lisbon has sent to Brussels under the new EU budget rules, saying it is consistent “with the macroeconomic strategy and fiscal policy outlined in the government programme, to increase productivity and competitiveness, while ensuring the sustainability of public finances”.
“The budgetary measures underlying the plan aim to increase the country’s attractiveness in areas of high added value, to strengthen its economic growth trajectory,” it added.
The plan highlights innovation, efficiency, and environmental sustainability as priorities, taking into account the EU government’s specific recommendations for Portugal. These include measures such as increasing the national minimum wage to €1,020 by 2028, defining a national strategic plan for birth and longevity, and ensuring universal and free access to crèches and pre-school education.
Other measures include reducing corporate tax rates, starting with a gradual reduction of two percentage points per year; providing public support and transitional incentives to address the most pressing housing shortages; investing in offshore wind energy production; and promoting energy efficiency in homes.
At the end of April, the EU introduced new rules for public deficits and debt (while maintaining the 3% and 60% of GDP ceilings, respectively) as part of the reform of the bloc’s fiscal rules, which member states will apply from 2025 after drawing up national plans.
EU member states had until the autumn to submit their multi-annual plans to Brussels, covering either four or seven years, which will now be discussed with the EU government so that the rules are fully in place by 2025.
In Portugal’s four-year plan (2025-2028), the government notes that the document was drawn up “in a difficult context, taking into account the new legal framework and EU requirements”.
The Portuguese RDP is worth €22.2 billion, with €16.3 billion in grants and €5.9 billion in loans from the RRM, covering 376 investments and 87 reforms.
(Ana Matos Neves, edited by Pedro Sousa Carvalho | Lusa.pt)
Source: euractiv.com
