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Covid-19: Brussels "very confident" that the PRR gives a strong impetus to the recovery of Portugal

The European Commission is "very confident" that the Portuguese recovery and resilience plan (PRR) will make "a strong contribution" to the recovery of the country's economy, particularly affected by the impact of the covid-19 crisis on international tourism sector.

During a press conference in Brussels, to present the "spring package" of the European Semester for the coordination of economic policies, the European Commissioner for the Economy, Paolo Gentiloni, asked about Portugal's high public debt, aggravated by the pandemic, stressed that there are member states who suffer from "specific difficulties", but expressed confidence in a solid recovery, strengthening in 2022, supported by the Recovery Fund.

Starting by noting that “Portugal was the first country to present the Recovery and Resilience Plan”, which, he stressed, constitutes “a very good example of cooperation” between the Government and the Brussels services, Gentiloni He indicated that it is necessary to have He specifies that "the challenges to revive the economy are also linked to certain specific difficulties, such as international tourism for example".

"This is one of the reasons why we have a stronger growth forecast for 2022 than for 2021. It will be gradual, but we are quite confident that the Recovery and Resilience Plan will make a strong contribution to this relaunch of the Portuguese economy ”, opined.

Portugal has officially handed over to Brussels its national plan, which provides for projects amounting to 16,6 billion euros, of which 13,9 billion euros relate to non-repayable grants, and which is still underway. review by the community executive.

The government hopes that the Portuguese PRR will be part of the first group of plans to be approved by the Commission and adopted by the Ecofin Council during the Portuguese Presidency, ie until the end of this month.

The impacts of the pandemic crisis on debt and tourism have today led the European Commission to keep Portugal in the group of member states for which it deems justified an in-depth analysis of macroeconomic imbalances, also highlighting the high level of bad debts. .

By adopting today the second part of the "spring package" of the European Semester for the coordination of economic and budgetary policies, still in a period of deep economic crisis caused by the covid-19 pandemic, the community executive approved the report of the Commission. alert mechanism, which identifies the Member States that Brussels considers should be particularly monitored, maintaining Portugal in this list of 12 countries.

“Portugal is experiencing imbalances. The vulnerabilities are linked to large 'stocks' of net external liabilities, private and public debt and still high bad debts, in a context of weak productivity growth, ”the European Commission said in the document.

The institution adds that "the public debt increased substantially in 2020 due to the recession and the support measures put in place to cushion the impact of the crisis", even if it forecasts that it "will decrease moderately this year and next year with the reduction of budget deficits ”.

Brussels also underlined “the significant impact of the covid-19 crisis on tourism, including in the near future” in Portugal, the institution noting that “the current account has turned into a deficit caused by the impact […] On tourism ”.

By adopting fiscal policy recommendations today, the European Commission confirmed that the rules of fiscal discipline enshrined in the Stability and Growth Pact will remain temporarily suspended in 2022, to allow member states to cope with the effects of the crisis. covid-19, a decision which should now be validated by the Council of EU finance ministers (Ecofin), currently under the Portuguese presidency, by the end of June.

CCA (ANE) // MSF

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