EU may need to rethink schedule for ‘bazooka funding’, warns president

War in Ukraine “creating such a different situation”

President Marcelo has acknowledged today that it may be necessary for the European Union to extend the deadline for member states to implement Recovery and Resilience Plans (PRRs) if the war in Ukraine ‘drags on’ (which most informed sources believe it will).

“I think the war is creating such a different situation that some things will have to change, and are changing,” Portugal’s head of State told journalists in Braga.

Regarding visible changes, he cited rules for balancing budgets, “financial rules have already been extended for another year”, he said, and “they will probably be for another year after that, and then probably another year…”

Similarly, “it may be that if the war goes on a lot longer” that Brussels concludes”the execution of all countries’ PRRs will need some slack, need more time”.

He admitted, no one can tell, because “nobody knows how long the war can last…”

In the case of the Portuguese PRR, Marcelo sees two types of threat – one resulting from the war and how it affects the cost of energy and raw materials; the other from the delay in public procurement.

“There are member states a lot worse off” than Portugal, however – countries that only now have their PRRs approved, “so they still haven’t even started”.

President Marcelo was quizzed on this issue following comments made by minister of the presidency Mariana Vieira da Silva, who admitted discussions were already underway over “how to deal with PRR goals” taking into account “significant price increases” and “difficulties in accessing certain raw materials”.

The minister told Rádio Renascença/ Público yesterday: “It is an inevitable debate, but it is not just a national question. It is in the context in which we are living”.

The President reiterated his recent assertion that “everyone loses from the war” in Ukraine. “I don’t know how people think it is possible to have a war that touches the whole world and nobody loses,” he said simply.“Even those far away, like us who think we are far away, we are not. We are close. In that sense, as long as the war lasts – and that is why its important to create conditions for peace – we are all losing something.”

In July 2021, when Europe approved Portugal’s PRR, president Marcelo welcomed the decision, appealing for the “maximum use” European funds with “efficiency and transparency”.

PRR commitments however need to be made by 2023, with all “respective expenses executed by 2026”.

It’s a tight schedule, even without war and open-ended inflation.

In October last year, Marcelo suggested “a mid-term review for PRR implementation should be done this year”, adds Lusa.

Source: LUSA