LISBON (Reuters) – Portugal's finance minister said on Monday the European Union would turn the Pandemic Recovery Fund into a permanent instrument for structural investments to address competitiveness challenges that can only be overcome at the EU scale. He said there was a need to make a change.
But Fernando Medina says that if discussions now begin about extending the 800 billion euro ($860 billion) temporary support program beyond 2026, leveraging investments by that deadline is no longer a priority. He said that this could give countries the wrong idea.
“This is the year to accelerate (investment). The further countries progress in implementing their recovery plans, the stronger the case for deadline extensions and the need for additional investment resources will become,” he told Reuters. .
Medina said EU finance ministers could start talks on extending the fund by the end of 2024 or early 2025.
He added that after allocating investments, the EU should transform the program into a permanent plan “with appropriate dimensions”.
To achieve that, the bloc will need to shore up its own financial resources, for example by increasing taxes on technology giants and on carbon emissions.
“This issue clearly needs to be put on the table,” he said, acknowledging the topic was “very sensitive” and could be exploited by far-right parties and other Eurosceptic groups. .
Medina said European elections scheduled for June were hampering progress in negotiations on a free trade agreement between the EU and the Mercosur bloc of South American countries, adding: “France's resistance to the deal in particular It continues or is increasing.”
He clarified that he was not directly involved in the negotiations, adding that the closeness of elections “in principle does not lend itself to any major understanding of structural change.”
Recent farmers' protests across the European Union have been sparked by dissatisfaction with high taxes, rising costs and cheap imports, among other things. Negotiations on a trade deal between the EU and Mercosur have resumed, fueling frustration over unfair competition in sugar, grain and meat.
(Editing by Andrei Kalip; Editing by Nick McPhee)