Commission endorses a partially positive preliminary assessment of Portugal's payment request

The European Commission has endorsed a positive preliminary assessment of part of the milestones and targets linked to Portugal's payment request for the third and fourth instalments under the Recovery and Resilience Facility (RRF).

The assessment concerns the payment requests that Portugal submitted in October 2023, for the third and fourth grant instalments (€1.77 billion and €0.82 billion) and the third and fourth loan instalments (€0.36 billion and €0.22 billion). The assessment covers the 47 milestones and targets set out in the Council Implementing Decision for the third and fourth instalments.

After looking at the evidence provided by the Portuguese authorities, the Commission considered 44 out of the 47 milestones and targets to be satisfactorily fulfilled. The 44 milestones and targets that have been satisfactorily fulfilled demonstrate significant progress in the implementation of Portugal's recovery and resilience plan. They notably highlight the continuation of the reform momentum in key policy areas. This includes, among others, a set of reforms aimed at improving the quality and sustainability of public finances, healthcare reforms to increase efficiency and resilience of the national health system and secure the rights of people with mental illness, the improvement of the effectiveness of Portugal's tax system and tax courts, the regulation of platform work, the improvement of the land registry system and the promotion of circular economy in public procurement. Several milestones and targets also concern the achievement of important steps for major investments in the areas of health, forestry, social protection, innovation, sustainable mobility, digital skills, culture, public finances and public administration. For instance, contracts have been signed for the purchase of electric buses, charging stations for electric vehicles have been installed, new research programmes for green innovation have been launched, computers have been provided to pupils and teachers and public services have been further digitalised. Investments to provide more social housing, housing for students as well as emergency accommodation for vulnerable groups have also been launched.

The Commission has found that one milestone and one target (M1.12 and T1.3) concerning reforms of the health sector and one milestone (M6.15) related to the reform of regulated professions, have not been satisfactorily fulfilled. The Commission is therefore activating the ‘payment suspension' procedure, as foreseen by Article 24(6) of the RRF Regulation. In line with the RRF Regulation and as explained in the Communication published on 21 February, this procedure gives Member States additional time to fulfil outstanding milestones, while receiving a partial payment linked to the milestones that have been satisfactorily fulfilled.

The Portuguese recovery and resilience plan includes a wide range of investments and reforms in 21 thematic components, with a focus on the green and digital transition. The plan will be supported by €16.3 billion in grants and €5.9 billion in loans, of which €2.2 billion was disbursed to Portugal in pre-financing on 3 August 2021, €1.16 billion under the first payment request on 9 May 2022, and €1.82 billion under the second payment request on 8 February 2023.

Payments under the RRF are performance-based and conditional on Member States implementing the investments and reforms outlined in their respective recovery and resilience plans.

The Commission strongly encourages all Member states, including Portugal, to proceed with the timely implementation of their respective recovery and resilience plans.

Next steps

In line with Article 24(6) of the RRF Regulation, the positive preliminary assessment and the payment suspension are two distinct procedures that follow different steps.

• As regards the positive preliminary assessment: the Commission has now sent its preliminary assessment of the milestones and targets that Portugal has fulfilled to the Economic and Financial Committee (EFC), asking for its opinion. The EFC's opinion, to be delivered within a maximum of four weeks, should be taken into account in the Commission's final assessment. Following the EFC's opinion on the positive preliminary assessment and Portugal's observations on the payment suspension, and taking both into account, the Commission will adopt the decision on the payment of the instalment, in accordance with the examination procedure, through a comitology committee. Following the adoption of the decision by the Commission, the payment to Portugal can take place.
• As regards the payment suspension: the Commission has communicated to Portugal the reasons why it considers that two milestones and one target were not satisfactorily fulfilled. This communication starts an administrative procedure between the Commission and the Member State concerned. Portugal now has a right to present to the Commission its observations within one month from the receipt of the communication. If, following Portugal's observations, the Commission were to confirm its assessment that the outstanding milestones and target have not been satisfactorily fulfilled, it will determine the amount of the payment to be suspended by applying its methodology for payment suspension (outlined in Annex II of the 21 February Communication). From that moment, Portugal will have a period of six months to satisfactorily fulfil the outstanding milestones. During this period of six months, the Commission will engage in active dialogue with the Portuguese authorities. If and when the milestones and target have been fulfilled, the Commission will lift the suspension of the payment and send its assessment to the EFC, following the above outlined procedure on the positive preliminary assessment.

The Commission will assess further payment requests from Portugal based on the fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress on the implementation of the investments and reforms.

The amounts disbursed to the Member States are published in the Recovery and Resilience Scoreboard, which shows progress of the implementation of the national recovery and resilience plans.

Members of the College said

President of the European Commission Ursula von der Leyen said: “Congratulations to Portugal for meeting a further 44 milestones and targets set out in its recovery and resilience plan. Portugal has carried out transformative reforms and major investments that will have a positive impact on a wide range of key policy areas. It has made important progress through the strengthening of social protection, by providing more social housing, through improvements to public services and healthcare, as well as increased protection for forests against fires. We encourage Portugal to complete its work on the remaining steps relating to reforms of the health sector and regulated professions. The Commission stands by your side.”