Portugal in line for €81 million from EU to offset impact of Brexit

Portugal will receive €81.3 million (in current prices) from the adjustment reserve created by the European Union (EU) to offset the financial impact of the UK’s exit, according to the final approval given by the Council on Tuesday.

In a statement released this morning, the rotating Slovenian EU presidency reports that “the Council today gave its final approval to a fund to help member states cope with the negative impact of ‘Brexit'”.

In total, 5.4 billion euros are at stake for the 27 EU countries, a figure in current and rounded prices that corresponds to the final agreement reached in the Council and that takes into account the importance of trade, fishing in the UK’s exclusive economic zone and also neighbourhood relations for regions that have a maritime border with London.

For Portugal, the amount stipulated is 81.3 million euros, the amount calculated based on trade in goods and services with the United Kingdom (81,358,331 euros) and fishing in the United Kingdom’s exclusive economic zone (28 euros), according to the annexe released by the Council of the EU.

In January this year, the Council had announced an amount of 58.3 million euros for Portugal equivalent to the first tranche allocated to the country under the fund.

This fund “will help the most affected regions, sectors and communities to cover the extra costs, compensate for losses or address other adverse economic and social effects directly resulting from Brexit, it is a “special one-off emergency instrument”.

The aim is to “support public and private enterprises facing disruptions in trade flows, including the new costs related to customs controls and administrative formalities”, the Council states, adding that Brexit “has created an unprecedented situation”.

Among the measures envisaged is support for small and medium-sized enterprises, communities and regional and local organisations, including small-scale coastal fishing dependent on fishing activities in UK waters, as well as the promotion of job creation and reintegration into the labour market of returning EU citizens.

Measures implemented between 01 January 2020 and 31 December 2023 will be supported, then aimed at covering expenditure incurred before the end of the transitional period.

The €5 billion fund was agreed last year by EU leaders as part of the 2021-2027 budget.

The post-‘Brexit’ deal between the EU and the UK allows both sides to continue trading without quotas or tariffs after the country leaves the EU bloc, but such a protocol does not avoid new costs and red tape for European companies doing business with London.

Today’s endorsement is the last legislative step after approval by the European Parliament in mid-September, with only publication in the EU’s Official Journal now remaining in the first half of October, the day on which the regulation comes into force.

Of the total ‘cake’, the bulk of the resources (€4.3 billion) will be made available to the 27 as pre-financing in three annual instalments – in 2021, 2022 and 2023 – with the remaining funds to be released in 2025 following a spending review.