First tranche of EU recovery funds could arrive all at once in July. Portugal should receive €2.15 billion

  • ECO News
  • 13 July 2021

EU Commission Vice-Presiden said that the first tranche disbursement of the Recovery and Resilience Plan (RRP) could arrive as early as July for the 12 countries with approved RRPs.

The European Commission will try to make the first tranche disbursement of the Recovery and Resilience Plan (RRP) later this month. In the press conference after the ECOFIN that approved 12 RRP, including Portugal’s, European Commission Vice-President Valdis Dombrovskis explained that the 13% pre-financing could arrive in July and in a single tranche, instead of phased payments.

“What is important now is to sign the financing agreement with the member states, which will allow us to start the pre-financing and in fact, it can be paid out as early as July,” Dombrovskis said, pointing out that given the success of the Commission’s issues on international markets, it may be possible to pay all at once rather than in several tranches.

After the signature of the financing and loan agreement with the European Commission, Portugal will receive pre-financing disbursements of around €1.8 billion (€1,807,948,257), which corresponds to 13% of the grants allocated to the country. In addition, it will receive €350,000 (350,870,000) relating to 13% of the amount in loans it has requested, for a total of €2.15 billion. These are the figures for Portugal’s pre-financing that appear in the European legislation adopted by the countries’ ambassadors and now by ECOFIN.

This Tuesday morning a European Commission spokesman, Balazs Ujvari, noted that the signing of the financing agreements could take different periods depending on the member states, but noted that the expectation is to have the process completed by the end of the month.

Portugal’s finance minister, João Leão, also expects the first tranche disbursement to happen in July. Speaking after the ECOFIN meeting, the minister said that the decision to approve the 12 RRP “will allow Portugal to receive the first tranche within the next few weeks, possibly even this month.”

The minister said that the “concrete amount” is yet to be defined, but that “it will be close” to €2 billion. The amounts mentioned above – €1.8 billion (grants) and €350,000 (loans) – are included in the legislative decision approved by ECOFIN, but there may be adjustments in the funding agreement to be signed between Portugal and the European Commission.

Although Dombrovskis did not confirm that Portugal may still receive a second tranche in 2021 related to the implementation of the RRP and the accomplishment of targets, João Leão admitted that there is a possibility as the first assessment by the European Commission of the milestones and targets is expected to take place this year. In this context, it will be possible to have “a second disbursement, no longer pre-financing, but depending on the targets set,” which will occur at the end of this year or early 2022.

On Tuesday morning, ECOFIN approved the first 12 RRPs: Austria, Belgium, Denmark, France, Germany, Greece, Italy, Latvia, Luxembourg, Portugal, Slovakia and Spain are the first EU countries with plans approved and about to start.