Portugal is considering drawing on €2.7 billion in European loans from COVID-19 post-crisis funds to invest in affordable housing, business capitalisation, and transport, according to its Recovery and Resilience Plan (RRP) released on Tuesday.
However, according to a source in the Portuguese government, recourse to EU loans is not yet guaranteed as it will depend on Brussels’ funding conditions regarding affordable housing, business capitalisation, and transport featured in the Recovery and Resilience Mechanism, the new European Recovery Fund’s main instrument.
While the intention to access EU loans was not clear in the first draft of the RRP submitted to the European Commission last October, it was mentioned that this part of the European Recovery Fund could be considered to make investments worth €4.3 billion in affordable public housing, support for companies, and railway rolling stock.
The recently presented RRP now provides for 36 reforms and 77 investments worth €13.9 billion in grants that will go to social issues, climate protection, and digitalisation.
Backed by €672.5 billion in grants and loans, the Recovery and Resilience Facility is the main element of the recovery package agreed in 2020 by the EU to address the social and economic crisis caused by the COVID-19 pandemic, the NextGenerationEU, with a total allocation of €750 billion, shared between grants and loans.
Combining the EU’s seven-year-budget for 2021-2027 worth €1.074 trillion and the Recovery Fund of €750 billion, the EU has a ‘bazooka’ of €1.8 trillion to address the crisis generated by COVID-19, with Portugal to get about €45 billion. This includes €30 billion from the EU budget for the next seven years, plus €15.3 billion in grants from the Recovery Fund – with the possibility to borrow, if desired. (Ana Matos Neves, Lusa.pt)