“The challenge is very big and demanding. And the ability to execute is the main risk factor of the Recovery and Resilience Plan (PRR). Efficient, quick, and effective execution is essential to produce the expected results. The sum of PT2020, PRR and PT 2030 totals 62 billion euros. We have never managed to execute three billion euros a year from community funds. Now they are going to six billion”, warned José Eduardo Carvalho, at the Alto Alentejo InMotion Business Forum, organized by Nerpor, on 24 June, in Portalegre.
Taking into account the difficulties that are foreseen, the president of the AIP defended that “it is necessary to take into account the simplification of the process of notices of competition, of the processes of evaluation of the candidacies and of the contracting processes. There is a need to make the access of the companies in the program more flexible. If we do not want a brutal selection shock, we have to solve the problem of moratoria and agreements to regularize the contributory and fiscal situation” and that the environment for these simplification processes is not being created.
Another major challenge pointed out by José Eduardo Carvalho was the recapitalization of companies, which he considers “imperative and must be done through capital instruments and not debt instruments. I'm afraid it won't happen that way”. “I'm referring to capital instruments that aim to reinforce the capital of companies. They can stay there for the entire life of the company, they can leave with capital gains or they can leave with a discount mechanism”.
José Eduardo Carvalho outlined the scenario in which companies currently live: “The PRR allocated 1.55 billion euros to the capitalization of companies, but the general picture is negative equity, deterioration of balance sheets, excess debt and lower EBITDA, and degradation of the treasury by the continuous fading of the effects resulting from the lay-off measures, moratoriums, progressive recovery and deferral of tax payments”.
The association leader defended that “the execution of the plan must have an effect on the priorities of structural change in the economy and the business fabric: capitalization, resizing, innovation and export capacity” and pointed out some positive aspects of the PRR: “for the first time the European Commission has resorted to financing through European debt to fight a recession. The second has to do with the injection of financial resources, which will have an impact, in the short term, on the growth of the Product. Finally, and taking into account the conditioning by the priorities defined by Brussels, the allocation of resources after the public discussion seems balanced, given the country's budgetary conditions", but he also mentioned that the "formatting of the PRR is framed in the priorities of the European Union which obliges to allocate 57% of the budget for the climate and digital transition, which does not bet on winning sectors, with transversal access to all economic sectors, and which has a large social dimension, greater than in other countries, which is under the vision of society that the Government adopts”.
The differences in some aspects of the various European plans deserved the analysis of José Eduardo Carvalho, who said that Germany's big bet was on hydrogen, France, in strengthening its export capacity, and Greece and Italy in mobilizing all resources financial (grants and loans) even at the expense of the increase in the public deficit. He also underlined that France and Germany reduce taxes, “which shows a great gap in public discussion in Portugal. How we could use European support to lower taxes was not introduced into the debate. What can be seen is that there are countries that have included investment expenditures in the State Budget in the investment plans of the PRR. Then they offset this reduction in investment in the OE with tax cuts for companies. That is, they reduced expenditure and revenue, that is, they will be able to cut taxes without increasing the public deficit”, he confirmed. “The truth is that the responsibility is not just the one who drew up the plan. It was also who contributed. There were a thousand and such public contributions, and no one presented similar measures or proposals”, he sentenced.