‘Focus economic support on Algarve, Azores, and Madeira’: Brussels advises over EU COVID-19 funding to Portugal
The European Commission today recommended Portugal to adopt prudent fiscal policies as soon as economic conditions permit, following measures to combat the COVID-19 pandemic. The recommendations from Brussels estimate that the economic consequences of the lockdown will be distributed in an unbalanced way in territorial terms, “in particular in regions markedly affected by tourism, such as the Algarve and the peripheral regions of the Azores and Madeira”.
According to a recommendation specifically addressed to the Portuguese government in the context of the spring evaluations of the European Semester, which evaluated the Stability Program and the National Reform Program, the European Commission urged Portugal to “pursue fiscal policies aimed at reaching prudent budgetary positions in the medium term and ensuring debt sustainability, encouraging investment “.
In the same recommendations, and in line with the clause that allows countries, in the context of combating the pandemic, not to respect the rules of the Stability and Growth Pact, Portugal must “take all the necessary measures to effectively address the pandemic, sustain the economy and support subsequent recovery.”
“The Commission’s overall assessment confirms a significant deviation from the recommended adjustment path towards the medium-term budgetary objective set back in 2019. However, in light of the activation of a general temporary escape clause [to the Pact of Stability and Growth], no further steps are taken in the process of significant deviation”, says Brussels.
In the context of combating the pandemic, Portugal must also “strengthen the resilience of the health system and ensure equal access to quality and long-term health care”, advises the Commission.
Brussels’ recommendations also address employment, arguing that Portugal must embark on drastic measures to support it and “give priority to measures that preserve jobs”, as well as “ensuring sufficient and effective social and income protection”, and support “the use of digital technologies for ensuring equal access to quality education and training to boost business competitiveness “.
According to the European Commission, they also advise that the government “implements temporary measures aimed at ensuring access to liquidity by companies, in particular small and medium-sized companies”, and “encourage public investment projects and promote private investment to promote economic recovery”.
“Focusing on investment in the green and digital transition, in particular in clean and efficient production and in the use of energy, railway infrastructure and innovation” is another of the recommendations of the EU group.