Finance minister calls for ‘focus’ in EU to ensure ‘full recovery’

Portugal’s minister of finance, João Leão, on Friday called for “focus” in the European Union and in Portugal to ensure “a full recovery” in the wake of the economic crisis caused by the Covid-19 crisis, while expecting “stronger-than-expected economic growth” in the country this year, of “close to” 5%.

“We are now seeing a real strong recovery in Europe and businesses are now in high activity,” he told journalists on arriving at an informal meeting of the Eurogroup of euro-zone finance ministers in Kranj, Slovenia. “And with the success of the whole [anti-covid-19] vaccination programme in Europe, we now expect stronger economic growth this year than previously forecast, of around 5% in Europe and also close to 5% in Portugal, which is very important.”

This means, he added, that “we now need to focus this year and next year on ensuring a strong and full recovery from the crisis and we need to focus on implementing the EU’s Next Generation [recovery fund] across Europe to ensure this.

“In the EU you cannot think about strategies separately and so we have to promote a debate on our fiscal monetary policies and we will have important meetings today to ensure that we are focused on ensuring a strong economic recovery and for a period of time to maintain sustainable finances,” Leão said, alluding to the Ecofin meeting scheduled for the afternoon.

On Friday’s Eurogroup agenda was the economic situation in the euro zone, which is still severely affected by the Covid-19 pandemic, even as the EU tries to start its recovery from the crisis.

At the meeting, which forms part of Slovenia’s six-month presidency of the EU Council, officials were to be briefed by Andrea Ammon, director of the European Centre for Disease Prevention and Control (ECDC), on the current epidemiological situation. The ECDC has forecast that hospital and intensive care admissions due to Covid-19 will increase slightly in the coming weeks, following a sharp rise in coronavirus infections in the summer – but without this being reflected in deaths, due to vaccine coverage.

The Eurogroup was then due to discuss the current economic situation, reviewing the uneven impact of the pandemic across economic sectors and regions. In particular, the euro-zone finance ministers were to look at the medium-term implications of the pandemic in terms of policy actions needed to avoid divergences, notably as regards the solvency of companies and adjustment capacity in the euro zone during the recovery period.

The debate comes just as the first EU funding for post-crisis recovery are being paid to member states, with the European Commission having already made available almost €49 billion in initial pre-financing payments to 11 countries, including Portugal, which has received €2.2 billion.

The funding is from the Recovery and Resilience Facility, valued at €672.5 billion (at 2018 prices) and the central element of the bloc’s NextGenerationEU plan, with €750 billion approved by EU leaders in July 2020 for the economic recovery from the crisis caused by the Covid-19 pandemic.