Portugal wants to mobilize 12 billion euros of debt already issued by the European Union

The Prime Minister considered this environment necessary for the European Union to reuse some 200 billion euros of the total debt already issued but not yet spent, with Portugal responsible for a share of 12 billion euros.

This proposal to support an industrial sector more dependent on energy costs was presented by António Costa at the opening of the preparatory debate for the next European Council on Thursday and Friday in Brussels.

“I hope the European Union understands that crises recur and therefore we must have a permanent crisis response mechanism, and not create a transitional mechanism for every crisis,” the leader of the Portuguese executive said in his initial speech. debate.

In the presence of deputies, the Prime Minister said that he was not ignoring the political difficulties associated with reaching a pan-European consensus on the issuance of new debt by Brussels, as well as the constitutional difficulties that some member states are facing when issuing debt jointly.

“But the crisis we are experiencing requires pragmatic and urgent responses. And there is a possible answer that does not require a new issuance of debt, but simply uses the debt already issued by the European Union and not yet used by the member. States,” said Antonio Costa.

According to António Costa, “More than 200 billion euros mobilized through the Next Generation program are not being used to lend to Member States.”

“These 200 billion euros can be reused to directly support companies and in particular companies that are energy intensive consumers such as ceramics, steel and chemicals – industries that are at risk of stalling across Europe and that we cannot risk. they stop. It is possible to pragmatically mobilize these resources that are already available and that states can fall back on simply by increasing eligibility,” he stated.

In the case of Portugal, António Costa specified, this eligibility authorization will be issued at the level of the Recovery and Resilience Plan (PRR).

“In other words, the permission under the PRR to mobilize about 12 billion euros of loans that we do not use and that we could mobilize to support, as needed, our companies most affected by the cost of energy”, is justified.

One of the central issues of the next European Council, from the point of view of António Costa, will be the model of response to the current inflationary crisis as a direct consequence of rising energy prices.

According to António Costa, the SURE program in response to the Covid-19 pandemic crisis has “worked well”.

“And for that reason, it should become a permanent mechanism,” even when what it finances should no longer be layoffs, but something that we should call “postponing”, that is, paying companies to continued to work. despite the dramatic increase in energy costs they currently incur.”

In his speech, António Costa expressed his full support for the proposal of the European Commission to create a platform for joint purchases of gas in order to achieve greater margins in negotiations in order to obtain more competitive prices and prevent supply disruptions.

“But no measure will be effective without a real European market. There is no European market until there is a real interconnection between all member states,” insisted the leader of the Portuguese executive.

Regarding the agenda of the next meeting of the heads of government and state of the European Union, the head of the Portuguese executive also expressed support for the strategy of decoupling the price of gas from the price of electricity.

“The Iberian mechanism, as a transitional mechanism, allowed, on average, even in a dry year, to set a price about 18% lower than what it would have been if it had not worked. On the other hand, and in order to limit price volatility, the European Commission proposes to change the international reference gas price, starting from a dynamic band of change, by setting a maximum and a minimum,” he said.

Also, according to the prime minister, “it is necessary to finally revise the mechanism for setting the price of electricity, putting an end to the marginalist mechanism, which this Wednesday no longer has any justification.”