EU’s advocate general looking into Portugal RRP

The EU advocate general has 19 active investigations open in Portugal over suspected irregularities involving European Compete funds.

According to online new source ECO, the EU organisation has been looking into possible fraud over financial support packages from Portugal’s Recovery and Resilience Plan (RRP).

Ten more investigations are currently underway compared to last year. The information was released at the start of the month but have now seen increased coverage as part of Operation Maestro involving an entrepreneur and a journalist suspected of syphoning off European Recovery and Resilience Facility (RRF) funds inserted in the RRP.

On Wednesday, Portugal’s Judicial Police (PJ) carried out 78 searches as part of Operation Maestro which is investigating projects co-financed by community funds. The suspects are suspected of having creamed off around €39 million between 2015 and 2023.

In a statement, Compete has confirmed that it is cooperating with investigations underway into irregularities over the programme Compete 2020.

“Compete does not know the details of the investigation but is cooperating with the authorities and is totally available to provide all necessary support and information, and emphasises its commitment to the transparent and rigorous management of public funds”, a statement read.

An activities report from the advocate general points to community funds for urban and regional development, agriculture and development, and the Portugal RRP among the programmes under investigation by the EU authorities.

Last year Portugal opened 26 investigations with the advocate general, bringing the total number of open investigations to 43. These investigations represent a loss of €928.6 million. Nevertheless, this amount is less than the €3Bn from 26 cases investigated in 2022.

The data shows that the investigations are centred around the districts of Lisbon and Porto, with the majority (15) linked to VAT fraud resulting in a loss of €848.5 million.

Portugal on track overall

Towards the end of last year The European Commission 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 key instrument at the heart of NextGenerationEU.

The assessment concerned the payment requests that Portugal submitted in October 2023, for the third and fourth grant instalments (€1.77Bn and €0.82Bn) and the third and fourth loan instalments (€0.36Bn and €0.22Bn).

The assessment covered 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 fulfilled demonstrated significant progress in the implementation of Portugal’s Recovery and Resilience Plan. They notably highlighted the continuation of the reform momentum in key policy areas.

This included, 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 securing 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 a circular economy in public procurement.

Several milestones and targets also concerned 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 activated 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 February 21, 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 green and digital transition. The plan is supported by €16.3Bn in grants and €5.9Bn in loans, of which €2.2Bn was paid out to Portugal in pre-financing on August 3, 2021, €1.16Bn under the first payment request on May 9, 2022, and €1.82Bn under the second payment request on February 8, 2023.

At the end of January the former Prime Minister, António Costa had said that all the targets for Portugal’s RRP would all be met in the area of decentralisation within the public administration.