Government to request another €3.3 billion in EU loans

EU commission calls for Portugal to “move full speed ahead” in recovery and resilience plan

Portugal has requested €3.3 billion in additional loans under the Recovery and Resilience Plan (RRP), the European Commission revealed today, calling for the country to “move full speed ahead” in implementation of the plan.

European Commission Executive Vice-President with the portfolio of ‘An economy at the service of people’, Valdis Dombrovskis, broke the news in Brussels as the EU executive presented its spring package of the European Semester in which Portugal was urged to end energy crisis support measures for families and businesses, and use the ‘slack’ to reduce the deficit.

A European source told Lusa that under the RRP, Portugal expressed “its intention to request additional loans, of between €3.3 billion and €11 billion,” when the plan was revised, and measures relating to the RepowerEU energy package were included.

Another source explained that it was more likely that the country would opt for €3.3 billion, although the specific amount of additional loans would only be known when it was officially submitted to the European Commission, which has not yet happened.

The latter source said that, according to Portuguese authorities, Lisbon should soon be submitting its revised RRP with the RepowerEU programme to Brussels.

In statements to the press, Valdis Dombrovskis also spoke of an “additional amount of €704 million in subsidies through the RepowerEU programme”.

“All this also requires additional reforms and investment, so it is important that (Portugal) submits the adjusted plan while continuing to move full speed ahead with implementation,” he said.

European Commissioner for the Economy Paolo Gentiloni, meanwhile, indicated that as far as the RRP is concerned, Brussels sees no “special delays”.

“We are just putting pressure on (Portugal) to finalise the chapter on RepowerEU and the successive stages of the plan,” he explained.

Gentiloni highlighted “the challenges that Portugal is facing” in budgetary terms.

“First (…), the debt ratios are decreasing, and if this trend continues, as is the plan of the Portuguese authorities, this would allow next year to be free of imbalances; while the second point we highlight is the fact that house prices have increased strongly in recent years, although this growth is now being moderated and the response in terms of policies is considered adequate by the Commission”.

Portugal’s government has already confirmed it is in talks with the European Commission for the reprogramming of the RRP in terms of funds and adaptation of projects.

Approved in 2021, the Portuguese RRP has a total allocation of €16.6 billion, €13.9 billion in subsidies and €2.7 billion in loans.

In information published on the government’s website during public consultation on the review last April, it was stated that the RRP will now have a maximum allocation of €20.6 billion, “representing an increase of around €2.3 billion in subsidies and €1.6 billion in loans, compared to the plan approved in July 2021.