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EU approves Portugal's recovery plan, first grants seen in July

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By Reuters
EU approves Portugal's recovery plan, first grants seen in July
EU approves Portugal's recovery plan, first grants seen in July   -   Copyright  Thomson Reuters 2021
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By Victoria Waldersee

LISBON – Portugal on Wednesday became the first EU country to have its recovery plan rubber-stamped by the European Commission, whose president Ursula von der Leyen said an initial disbursement from the bloc’s COVID-19 recovery fund should come in July.

“The plan clearly meets the demanding criteria we have jointly established,,” von der Leyen told reporters after meeting Portuguese Prime Minister Antonio Costa in Lisbon. “There is no doubt that it will deeply transform Portugal’s economy.”

In April, Lisbon was also first with the official submission of its plan to Brussels, expecting the recovery programme to increase GDP by 3.5% by the end of 2025, compared with what it would be without it.

Portugal’s tourism-dependent economy contracted 7.6% in 2020, in its steepest recession since 1936.

Portugal wants to use the nearly 14 billion euros in EU grants until 2026, as well as some 2.7 billion euros in loans, out of the bloc’s 750 billion-euro pandemic recovery package, in a bid to reboot the economy and increase competitiveness.

It plans to give around 5 billion euros to companies, reinforcing their equity, supporting investments in innovation, greener production processes and digital tools and skills.

The plan also envisages dozens of investment projects in health, social housing and infrastructure.

The government has predicted an economic growth of 4% this year, while the central bank earlier on Wednesday raised its growth forecast to 4.8% from 3.9% predicted in March, expecting a sharp increase in investment already benefiting from the European recovery fund.

Last year, the economy contracted 7.6% in what was its worst recession since 1936.

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