Brussels, Oct. 14, 2024 (Lusa) - In the first plan under the 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 "special challenge" of reformed economic governance.
"The EU's new economic governance framework will have decisive consequences for policymaking at 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 targets for spending and investments and reforms now sent by Lisbon to Brussels under the new EU budget rules, which said that it was aligned "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 stimuli to resolve the most pressing housing shortages, and investing in offshore wind energy production and support for energy efficiency in homes.
Since the end of April, the EU has had new EU rules in place for public deficit and debt (while maintaining the ceilings of 3% and 60% of GDP respectively), given the reform of the bloc's budgetary rules that member states will start applying in 2025 after drawing up national plans.
Member states had until the autumn to submit their multi-annual plans to Brussels, either for four or seven years, which will now be discussed with the EU government so that, by 2025, the rules will apply in full.
In the Portuguese four-year plan (2025-2028), the government notes that the document "took place in a difficult context, taking into account the new legal framework and EU requirements".
"The preparation of these medium-term plans took place in a context that constitutes a special challenge for both the member states and the Commission, taking into account the novelty of the rules and framework that have only recently come into force, as well as the comprehensive, complex and demanding exercise involved in preparing such plans," it emphasises.
Even so, the government emphasises that, during the timeframe of the current legislature until 2028, it "clearly intends to speed up the process of convergence with the EU".
The Portuguese RRP is worth €22.2 billion, with €16.3 billion in grants and €5.9 billion in loans from the RRM, which relate to 376 investments and 87 reforms.
ANE/ADB // ADB.
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