Dependence on European funds worries Portuguese opposition

Euro sign in front of ECB in Frankfurt [EPA/ARNE DEDERT]

Portuguese MEPs José Manuel Fernandes (PSD) and Pedro Silva Pereira (PS) agree on the importance of European structural funds in public investment, although the former says it is “worrying” and the latter considers it “strategic”. EURACTIV’s media partner Lusa reports.

“We are not always aware that the roads we travel on, the water we drink, the solid waste, the hospitals, the nurseries, the homes, the vocational schools all involve European funds. But at the moment we are overly dependent on the European Union (EU) funds. More than 80% of the public investment projects under implementation are financed by the EU budget. This is worrying,” warned Fernandes.

Speaking to Lusa, the Social Democrat MEP, who is the only Portuguese member of the group of the European Parliament (EP) negotiating the next EU budget for 2021-2027, recalled that Portugal has already received about €100 billion under successive Multiannual Financial Frameworks (MFF). He admitted that “we are not always aware that if it were not for the funds, the quality of life would be much lower than what we have.”

“Community funds are a very important part of Portuguese public investment. This happened during the last MFF, as in previous budgets, which makes the issue of the financial package of community funds of strategic relevance for our development and for our economy,” Pereira said.

The opinions of the two MEPs diverge from this point onwards.

For the Socialist MEP, the European Structural Funds and Investment Funds are “absolutely vital and strategic for the country,” also due to “budgetary restrictions that, somehow, always limit the room for manoeuvre in relation to the volume of investment,” and for Fernandes they should be complementary to a more national effort.

“There is a question that we have to start asking: shouldn’t the state budget also be used for investment? Nowadays in Portugal, you usually get the answer: it’s not being done because there is no money from European funds to finance it. No, the state budget also has to help with funding and European funds should serve to add value, and never to replace the state budget,” he argued.

According to the Social Democrat Fernandes, the government did the opposite of what it had promised.

“Public investment is lower than what it was under the ‘Troika’. We are using European funds. The government is more concerned about distributing than creating wealth, and the funds should be used to leverage investment,” he concluded.

At a time when cuts are being made in the financial package for Portugal in the next Community budget, Pereira said he considered excessive dependence of public investment on Structural Funds worrying, and added “there are so many people who do not realise the importance of budgetary capacity of the European institutions to respond to the needs and wishes of citizens.”

“It would always be positive if we could have other alternatives, but this is not a good reason to give up community funds. Community funds are needed and the EU has a responsibility for budgetary solutions that favour of convergence,” he says, considering that, “this is certainly not the time to think about alternatives to EU funds, because that would be giving the wrong message.”

According to Fernandes, before the already announced cuts – which could be mitigated in the final draft of the EU MFF for 2021-2027 – António Costa’s government should “write a European fund script,” and not be a “mere actor or user.”

“We can influence the regulations. We cannot ask the question: what is missing there, we must realise what makes us competitive, and then we have the programmes that accommodate the needs imposed by reality,” he noted, also warning of the need to improve the execution of community funds.

“Portugal has a 30% execution (rate). We are two years away from 2020. We have more than €17 billion authorised so far and we have not executed €8 billion. Therefore, it is urgent to improve the implementation of funds, because there is no shortage of where to apply them. We need rules for the execution of the funds and, at the same time, we must already be working on the next ones, defining Portugal’s strategy,” he concluded.

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