Using European loans requires caution, says the European Union government

The Planning Minister stressed that the € 2,700 million in loans the government is considering under the Recovery and Resilience Plan (PRR) depend on the “macroeconomic debt issue” and require caution.

“The 2.7 [mil milhões de euros] They were neither discarded nor inserted. They remain registered here on the condition that the conditions under which they may be used are clarified. Our situation regarding the macroeconomic issue of the country’s indebtedness, which objectively conditions us and advises us to use this amount in the form of loans carefully, ”Nelson de Souza said in statements to the Lusa agency and other media.

The government is considering using European loans from the Covid-19 post-crisis funds of EUR 27 billion to invest in affordable housing, capitalization of businesses and transport according to the published Recovery and Resilience Plan (PRR).

Following a draft submitted to the European Commission last October and a discussion process with Brussels, the Portuguese government is today submitting the preliminary and summarized version of the PRR to a public consultation in which it sets the target of access to credit of 2,700 million Euros for Europeans. despite the fact that Prime Minister António Costa has rejected this resource because he intends to use “full” subsidies.

The Planning Minister said today that “the situation remains” and therefore it is necessary to find a solution that “allows these loans to be used” as they “finance investments that are very important”.

Also when asked about the demands made by Brussels in relation to the draft presented in October last year, the minister said that it was made in two ways.

The first, “not so much about investment” because “it asked for justification, details of costs, details of planning, details of objectives”.

The second in a dimension “related to the reforms to be introduced” and especially those that “have been advocated in the context of the so-called European semester”, ie recommended in the lines of the European Commission (EC) to each Member State.

“It was more than saying ‘make this investment or not,'” he added.

Portugal’s post-crisis recovery and resilience plan for access to covid-19 community funds provides for 36 reforms and 77 investments in social, climate and digital areas, for which total grants of 13.9 billion euros will be awarded.

Following a draft submitted to the European Commission last October and a discussion process with Brussels, the Portuguese government is today putting the preliminary and summarized version of the Recovery and Resilience Plan (PRR) in a public consultation, which defines “19 components” 36 reforms and 77 integrating investments ”.

The executive justifies that “on the basis of the diagnosis of needs and challenges” three “structuring dimensions” have been defined – resilience, climate change and digital transition – to which 13.9 billion euros will be allocated. Euros in non-repayable grants from European post-crisis funds.

Loans of € 2,700 million are also foreseen in the document, but an executive source guarantees that “it is not yet certain” that Portugal will use this aspect of the Restoration and Resistance Mechanism, the main instrument of the new European Union’s Restoration Fund.

The largest portion (61%) of PRR funding is expected to go to resilience, with grants totaling € 8.5 billion and loans totaling € 2.4 billion.

For example, grants are earmarked for housing (1.6 billion), investment and innovation (1.4 billion), skills and qualifications (1.35 billion), the National Health Service (1.3 billion) and social actions (583 million).

The magnitude of climate change is 21% of the total amount of the PRR and foresees the mobilization of grants of 2.8 billion euros and loans of 300 million euros.

Examples of subsidy bets are sustainable mobility (1030 million euros), decarbonisation (715 million euros) and energy efficiency of buildings (620 million euros).

For the digital transition, which concentrates the remaining 18% of the total amount of PRR, the government has set aside 2.5 billion euros in grants (excluding recourse to credit) for issues such as business digitization (650 million) and public administration ( 631 million) and the digital school (559 million).

The release comes after Prime Minister António Costa announced in Brussels late last week that the PRR would be publicly negotiated this Monday in the hope that the final version of the document could be presented to the European Commission in early March.