Portugal’s prime minister expects EU budget rules to be suspended until 2022

  • Lusa
  • 1 October 2020

Prime minister António Costa said on Thursday it expected EU' budgetary rules to remain suspended until at least 2022.

The Portuguese government said on Thursday it expected Brussels’ budgetary rules to remain suspended until at least 2022 when the European Union (EU) countries are expected to recover last year’s Gross Domestic Product (GDP).

In order to allow member states to support their economies in times of crisis generated by Covid-19, the European Commission proposed last March an unprecedented suspension of budgetary discipline rules (on matters such as deficit), through activation of the general safeguard clause.

Another measure adopted by the EU executive at the time was to relax the state aid that countries can provide to their economies, support in the form of loans from states or recapitalisations, for example, which are normally blocked by Brussels.

“I also spoke to Commissioner [Margrethe] Vestager about the need to extend the flexibility on state aid, which comes to an end at the end of this year, and it is clear that by the end of 2021 we will have the economy still heavily constrained by this crisis, and that this deadline must therefore be extended,” António Costa told journalists.

Costa, who is in Brussels for an extraordinary European summit between today and Friday, held bilateral meetings this morning with European Commissioners Paolo Gentiloni (Economic Affairs) and Elisa Ferreira (Cohesion and Reforms), with European Commission Vice-President Margrethe Vestager.

Asked about state aid to TAP and SATA airlines, he said that “these are matters which are taking place through services, normally and smoothly”.

The Prime Minister acknowledged that the government would have to create or strengthen some measures given the impact of the Covid-19 pandemic.

“Even today credit lines to companies have been announced and will certainly have to be extended,” he said.

“This exception framework has to be maintained as long as there is a situation of exception and crisis” he told journalists.