On December 3, Portuguese Prime Minister Luis Montenegro emphasized the need for “equal opportunities” and expressed support for the existence of European commercial and industrial giants, provided that France and Germany do not “hold hostage” their development.
For reference, on the European level, the Draghi report proposed the creation of a kind of ‘European champions’ to compete with the US and China.
The European Union is losing ground to China and the United States, not only in terms of investment but also in productivity. Therefore, the 27 member states need to reinvent themselves to regain competitiveness in these markets.
To achieve this, the European bloc would need to invest 5% of its GDP annually—approximately €800 billion—in strategic areas to increase productivity by 6% over 15 years. How? One of the identified solutions is the regular issuance of joint debt. Mario Draghi, the former president of the European Central Bank, presented this analysis to Commission President Ursula von der Leyen as she prepares to take office at the end of the year. The expectation is that the recommendations from the former Italian prime minister will be adopted and begin to yield results within the next five years.
“The report calls for radical changes that must be implemented urgently and concretely,” urged Mario Draghi on September 9 during the presentation of the 400-page document containing 170 measures aimed at achieving these goals. “We are not starting from scratch. We have the foundations; we just need to act. It will be a matter of doing this or facing a slow agony,” he warned.
Prime Minister Montenegro reiterated that the political and financial instability that is affecting the two largest European economies could “impact the near future,” as a result of “the uncertainties on the horizon” in Germany and France. Nevertheless, the Prime Minister is steadfast in his refusal to “complain” and maintains that Portugal can “assert itself” on the international stage by exploiting the vulnerabilities of other countries in the Old Continent during this time.
The head of the Executive maintained that Portugal presently boasts a robust international reputation, thereby establishing itself as one of the European nations with the most favorable investment climates.
“As I believe that Portugal should have more and more large companies, I believe that Europe should have commercial and industrial giants, as long as the strategy for their establishment and development is not solely dependent on the interests of France and Germany – and now more countries are entering this orbit,” he explains. “If there are decentralized champions, Europe can win. If they are centralized, it will pay for itself in the next moment”,
“I am an advocate of creating European champions, provided they are not all concentrated in France and Germany,” responding to a question about the possibility of creating “European champions” in terms of investment.
However, he added a condition: “Europe can have commercial or industrial giants; I see no problem with that, as long as the strategy for their creation and development is not solely dictated by the interests of France and Germany, which is often the case—and now includes two or three other countries.”
The new focus of European cohesion policies should be equality of opportunity, Montenegro emphasized. “We are very interested in deepening the vision that should underpin cohesion policies,” he stated.
He stated that the government is in the process of developing a “new approach” to the European cohesion pillar. He cautioned, “I believe the days when Portugal went to Europe with an outstretched hand asking for cohesion funds no longer align with today’s EU strategies and do not align with solidarity or understanding from our partners if we are always demanding help in the same way.”
He continued: “The solidarity we should ask for is primarily to ensure equal opportunities. Today, for us to have a cohesion policy that matters, it’s not just about accessing EU funds and financing. We need that, of course, but more importantly, we need our companies to have the same conditions as those in Central or Eastern Europe.”
As an example, Montenegro pointed to energy production and distribution, arguing it is “unacceptable that more than 10 years have passed and the connection and interconnection processes between the Iberian Peninsula and Europe remain exactly where they were a decade ago.”
“After agreements were signed with the commitment of the Portuguese, Spanish, and French governments, along with the EU’s commitment (…) it’s unacceptable that excuses are continually made for why this interconnection has not been completed,” he said.
Montenegro outlined the consequences of these delays: “At the same time, we are undermining equal opportunities, European autonomy, and reducing dependency on external energy supply. We are failing to capitalize on the energy we can produce, and in the Iberian Peninsula, we are wasting investments aimed at ensuring a climate transition, particularly in renewable energy production.”
“The inability to provide Europe with the green energy we are capable of producing contradicts the principles of the European Union,” he concluded.
In response to the credibility of the ambitious growth projections for the Portuguese economy until the end of the legislature, Montenegro stated that “the fundamental variable is investment.” Consequently, the country must be “especially attractive from a tax point of view, in terms of bureaucratic burden, in attracting talent and in promoting clusters of activity to increase good value chains and business plans”. Additionally, he underscored the significance of reducing the Imposto sobre o Rendimento das Pessoas Coletivas (Corporate Income Tax) to “provide the boost that those who are observing and deciding the location of investments are expecting to receive.”