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Portugal giving 5 bln euros from EU recovery fund to companies

04/16/2021 | 12:59pm EDT

LISBON, April 16 (Reuters) - Portugal announced on Friday it would give around 5 billion euros ($5.99 billion) from the EU recovery fund to companies over the next five years in a bid to reboot the economy and increase competitiveness after the COVID-19 pandemic.

Prime Minister Antonio Costa said the biggest chunk of the support package, worth 1.55 billion euros, would help companies reinforce equity, followed by 1.36 billion euros for investments in innovation.

The Portuguese plan, which will soon be sent to Brussels, also includes 715 million euros to support companies making their production processes less dependent on carbon and 650 million euros to boost digital tools and skills.

"Companies will be key partners... to transform the opportunity generated by the recovery plan into a reality that will transform the country," Costa said during an event to present the plan.

"We can't just look at the emergence of the pandemic in the present but we have to now focus on building our future," he added.

Portugal wants to use the nearly 14 billion euros in EU grants until 2026 out of the bloc's 750 billion-euro coronavirus recovery package, but lowered its loans forecast to 2.7 billion euros from the 4.3 billion euros predicted in October.

The government said it expected the recovery programme to increase GDP by 3.5% by the end of 2025, compared with what it would be without it.

In addition to projects supporting a "greener and digital economic model", the plan envisages dozens of investment projects in health, social housing, innovation and infrastructure.

Portugal's government on Thursday cut its 2021 economic growth forecast to 4% from 5.4% after a severe worsening of the coronavirus pandemic at the start of this year forced a nationwide lockdown lasting over two months.

Portugal's tourism-dependent economy contracted 7.6% in 2020, in its steepest recession since 1936. ($1 = 0.8350 euro) (Reporting by Sergio Goncalves; Editing by Catarina Demony and Jonathan Oatis)


© Reuters 2021
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