European Commission endorses Portugal’s €16.6 billion recovery and resilience plan

The European Commission has today adopted a positive assessment of Portugal’s recovery and resilience plan. This is an important step towards the EU disbursing €13.9 billion in grants and €2.7 billion in loans under the Recovery and Resilience Facility (RRF) over the period 2021-2026. This financing will support the implementation of the crucial investment and reform measures outlined in Portugal’s recovery and resilience plan. It will play a key role in enabling Portugal to emerge stronger from the COVID-19 pandemic.

The RRF – at the heart of NextGenerationEU – will provide up to €672.5 billion (in current prices) to support investments and reforms across the EU. The Portuguese plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

The Commission assessed Portugal’s plan based on the criteria set out in the RRF Regulation. The Commission’s analysis considered, in particular, whether the investments and reforms contained in Portugal’s plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

Securing Portugal’s green and digital transition

The Commission’s assessment finds that Portugal’s plan devotes 38% of its total allocation to measures that support climate objectives. This includes investments to finance a large-scale renovation programme to increase the energy efficiency of buildings or the promotion of energy efficiency and the use of alternative energy sources in industrial processes.

The Commission finds that the Portugal’s plan devotes 22% of its total allocation to measures that support the digital transition. This includes efforts to digitalise the public administration and to modernise the computer systems of the National Health Service, as well as technological laboratories in secondary schools and professional training centres.

Reinforcing Portugal’s economic and social resilience

The Commission considers that Portugal’s plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Portugal by the Council in the European Semester in 2019 and in 2020. It includes measures in the areas of accessibility and resilience of social services and the health system, labour market, education and skills, R&D and innovation, climate and digital transition, business environment, quality and sustainability of public finances and efficiency of the justice system.

The plan represents a comprehensive and adequately balanced response to Portugal’s economic and social situation, thereby contributing appropriately to all six pillars of the RRF Regulation.

Supporting flagship investment and reform projects

Portugal’s plan proposes projects in six European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the green and digital transition. For instance, Portugal has proposed to provide €610 million to renovate public and private buildings to improve their energy performance. This will result in Portugal reducing its energy bill, greenhouse gas emissions and energy dependence, as well as reducing energy poverty.

The assessment also finds that none of the measures included in the plan significantly harm the environment, in line with the requirements laid out in the RRF Regulation.

The control systems put in place by Portugal are considered adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.

Members of the College said:

President Ursula von der Leyen said: “Today, the European Commission has decided to give its green light to Portugal’s €16.6 billion recovery and resilience plan, the first to be endorsed by the Commission. The plan was designed in Portugal. The reforms and investments contained in this plan will allow Portugal to emerge from the COVID-19 crisis stronger, more resilient, and better prepared for the future. In short, it will help build a better future for the Portuguese people. We will stand by Portugal every step of the way. Your success will be our success. A European success.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Portugal was the first country to present its plan and today we are happy to confirm our positive assessment. This is a solid plan that will put Portugal on a path of higher growth, create new jobs for the future as well as stronger and sustainable social protection. The proposed measures cover a broad spectrum of reforms and investments to equip Portugal for the green and digital transition, ranging from digitalising the public administration, improving workers’ skills, creating energy-efficient housing, to better protecting the country’s vast forests. I also welcome the plan’s strong social focus, including measures to improve childcare and strengthen the health care system. This plan will allow Portugal to grow back stronger. We will now work closely with Portugal on its full implementation.”

Paolo Gentiloni, Commissioner for Economy, said: “The reforms and investments included in the Portuguese plan will enhance the country’s resilience and give a strong boost to its climate transition and digital transformation efforts. With its measures to support social services, the national health service and education and training, the plan also has a very strong social dimension. This is our first completed assessment of a national recovery and resilience plan, marking a key milestone in the implementation of NextGenerationEU. And it is fitting that the first plan to be assessed positively is Portugal’s: not only because it was the first to be submitted, but also because the Portuguese Presidency played such a key role in putting in place the legal and financial framework for this unprecedented common European endeavour.”

 

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