“I think the agreement reached is a good agreement, it was at the limit of what would make this fund sufficiently robust fund to respond to this first phase of the crisis. And, in the combination of loans and grants, I think we will be left with a fund that will have around 700 billion euros. It is in any case a historic step to set up a fund of this nature based on the issuance of debt by the Commission”, said António Costa.
The Prime Minister, who was speaking in Brussels before the formal start of the fourth day of the European Council devoted to the European economic recovery plan in the face of the Covid-19 crisis, stressed that “something that is important is that, in this significant reduction in the amount of the Fund “at the level of non-refundable transfers” it was essentially possible to protect what were the “national envelopes”.
“And, therefore, except for some mishaps this afternoon, what we can count on in relation to the Recovery Fund, with regard to Portugal, in its different dimensions, is with a budget of 15.3 billion euros, which has execution scheduled for between January 2021 and 2026 “, he indicated.
Costa highlights that this is “a sum that imposes enormous responsibility” and gives a “very significant opportunity for the country to respond with vigour to the very deep economic crisis”, giving it a “capacity for response” that Portugal would not otherwise have. He explained that the country has now ‘lost’ in the Fund due to the decrease in its amount, but it will be ‘compensated’ in the Union budget for 2021-2027, the next negotiating ‘marathon’.
Explaining that, from the Commission’s initial proposal, of a 750 billion euro fund, with 500 billion to be disbursed in the form of grants [straight grants], it was switched to a 700 billion fund with ‘only ‘390 billion euros in transfers (a cut of 110 billion, approximately 20%), Costa pointed out that the so-called national envelopes ended up being only “marginally” reached.
“The package financed a set of programs, some with a national dimension, others with centralized management, by the Commission”, with the cuts mainly affecting the latter, and “that is why they only affected national programs only marginally”.
“In our specific case, there is a difference of about 400 million euros between what was the initial version and the current version. Those 400 million euros, by the way, we have compensation mechanisms, not now here in “Next Generation” [the Recovery Fund], but in the Multiannual Financial Framework”, he indicated.
On the other hand, he added, as there was a reduction in discounts, and Portugal also pays for these ‘rebates’, the contribution will be less, “so the net difference will be not 400 million euros, but 230 million euros”, an amount that which will then be compensated in its own way in the Union budget over the next seven years.