AEP warns: Portugal risking for the third poorest country in the European Union
The Portuguese Business Association (AEP) asks the government to channel a community minimum of 67% of the two Portugal 2030 community funds to companies in order to offset the thirds allocated by the Recovery and Resilience Plan (PRR) to the public sector.
Possible reprogramming of the PRR should also seek tourism (100%) in favor of companies. This is the case of delays by the State “at risk of non-execution” due to the efficiency of the administrative machinery, cases of delays resulting from anticipated expenses or the increase in construction costs.
This reorientation of European funds in favor of the country’s reindustrialization and competitiveness is one of the main proposals of the study released this Tuesday by the AEP: “From the pre-post pandemic – The new challenges”. Alongside the resistance to reducing the IRC to 17% and other measures to unlock the potential for productivity and employment growth in Portugal.
On the date on which it celebrates 173 years, the third business association meets this afternoon, in Leça da Palmeira, to propose to the government a “clear and ambitious strategy” capable of “reversing the path of relative impoverishment vis-à-vis other countries”. of the European Union” (EU). of São da República, Minister of Economy Marcelo Rebe Sousa, da Costa Silva e do Mar.
“The great strategic aim for the decade is to put Portugal back, at least, in the top 15 of the richest countries in the EU in 2030, in terms of standard of living”, reads the AEP study to which Expresso had access.
“The intermediate objective that allows us to achieve the strategic purpose is an economic growth of at least 5.2% per year in terms of 2023 to 2030, which is a real strong translation of our growth potential, practically in line with Ireland , the most affected country in the EU. Strong economic growth, proposed as an intermediary, results in a higher productivity objective (and productivity) and an increase in employment growth, which run from a broad set of measures”, the business association.
It should be noted that Portugal is currently in 21st place in the European ranking of GDP per capita in purchasing power parities (PPP). “In a worst-case scenario of policies, speculation and few simplifying assumptions, Portugal would go from the sixth GDP per capita in 2023 to the fourth in 2030”, warns the AEP study. In the short term, risk even drops to the poorest third of its productivity level.
“The strength of economic objectives” – defends the logo of the study’s introduction and its competitiveness – Luís Miguel Ribeiro, “works, within the outlined strategy, as president, one of the accelerators of the economic and social transformation necessary for the economic and social transformation necessary for achieve higher desired levels of wealth in a sustained way”.
Attention to productivity
The study foresees the worsening of the divergence vis-à-vis the EU in terms of GDP per capita.
In the decades of this millennium, Portugal was overtaken by the Czech Republic, Slovenia, Malta, Lithuania or Estonia. In 2021, it was once again overtaken by Hungary and Poland.
Now Portugal “runs the risk of becoming the sixth poorest in the EU 2023 if it does not achieve productivity and growth, making the most of the influx of European funds”. Based on the fall of the European Commission, AEP warns that the country could be overtaken by Romania and soon fall to the sixth poorest country among the 27.
“This scenario is materialized in Portugal not being able to quickly increase the pace of GDP growth compared to European peers (critical wealth generation capacity), for which it will be crucial to increase productivity. This must be the great potential for wealth and the process of great importance for the great transformation of the country, the great potential for wealth and the process of great importance for the average European life and the country. , with more countries, of the standard of living of the most developed”, reads in the study of the countries.
And at the end of the decade? “In a worst-case policy scenario, few assumptions and few simplifying assumptions, Portugal would go from the sixth GDP per capita in 2023 to the fourth PPC 2030”, adds the AEP.
But the fall may not stop there. The “productivity could become the third EU up to 20 of old age” – above Bulgaria’s Greece alert “pointing to a term3 of the worst” – only term of living23 of the alert – of only term of living3”.
“Given the strong link between productivity and GDP per capita, this is also the predictable ranking for living standards after a few years,” the AEP study reads. “If nothing changes at the business level – that is, if the European funds from the European sector of the PRR and Portugal 2030 do not operate a true structural transformation of productivity and level, which must involve a focus on support in the private sector, who else invests, exports and creates jobs and wealth – after 2023 Portugal will become not only one of the three least productive countries in the Union, but also one of the three poorest”.
Less taxes and other measures
AEP AEP the following proposals to address structural weaknesses, eliminate costs and accelerate the country’s sustainable economic growth:
1. Composition of growth, reinforcing the growth capacity of investment – including innovation – and exports, not without increasing the weight of their wealth generation and greater increase in the capacity of their wealth generation and greater distribution in a more sustainable and with greater intergenerational equity.
This implies more ambitious targets for 2030, for example, 25% for the share of investment in GDP and 28% for the share of industry in gross value added (GVA). The objective should be to bring the weight of exports to GDP to 63% (10 percentage points of the official target) to reverse the negative balance above the balance of goods and services, generate surpluses and cancel the net external debt (target of 0% of GDP) .
2. Qualify and requalify people, ensure the quality of human resources so that companies and the country can confidently face social and productivity challenges.
One of the proposals is, in launch, a program for the reification of assets, on a large scale, for the reification of national assets, for example; young and older generations; immigrants and refugees.
3. Ensure short-term and long-term availability of labor – a necessary condition to unlock the potential for expansion of the activity and average employment – availability at term, in the various sectors, labor in quantity and quantity with visible characteristics for its growth, through the determination of people to work and live in Portugal and of the population.
Enter how to reduce the social contributions of the proposals in the hiring of contracted people – namely, maintenance of the companies, cost and potential, in Portugal. Or reduction of the reduction on the burden on young tax and work or in general medium and high allowed the net income of the most projected, and more projected and projected. It also proposed a more favorable tax treatment of productivity premiums, contracts by objectives, variables and efficiency functions. Or establishing a Law (Labor Code, for example) of a link between certified and recognized – as long as reflected in greater productivity –, both in the public and private sectors.
4. Business dynamics with numbers of gains of scale, increasing the average size of companies, cooperation between and the survival rate.
One of the proposals is, for example, the reinforcement of tax and financial benefits to increase the scale according to the intensity and complexity of the operation – whether projects, joint ventures, complementary groupings of companies, or for example – enhancing sets of the proportion of companies involved in cooperation projects.
5. Eliminate context costs, having as objectives: less and better State, connectivity infrastructures that enhance internationalization; accelerate the digital transition and enhance attractiveness.
The target for 2030 for the public debt to GDP ratio should be a maximum value of 90%, close to the value in 2009, before the last request for external assistance.
This will imply a clear and credible strategy for defining the medium term, which improves public services while reducing the weight of the State in the economy and the tax burden on companies and families. In this field, the AEP defends a reduction of the normal IRC rate of 17%, the reduction of surcharge rates, the reduction of autonomous taxation; the reduction in the rates of young entrepreneurs; the reduction of the social contributions of the examples, for example.
6. In addition to capital and work, ensure other resources for growth – energy, water, quality – at affordable prices, with safety and quality of life, safeguarding quality, quality.
In addition to accelerating the new conditions of renewable energy and the circular economy, a proposal is guaranteed for the new conditions of use of the bases of the climate does not put new conditions of use of the companies, namely the conditions of use of the companies, specifically, for SMEs, and new unjustified or inappropriate green taxation. Furthermore, it is necessary to guarantee the competitiveness of companies and generate new areas of “green business”, but also to guarantee the competitiveness of companies and generate new areas of “green business”. exploring other promises of power generation without carbon control.
7. Economic re-industrialization, allowing for a greater structure in the structure and external accounts, with less dependence on tourism (more volatile), training the engine of the economy, with greater capacity to drag other sectors.
The targets for 2030 should serve the weight of the industry in the GVA of 28% and the weight of the manufacturing industry in the position of foreign direct investment (FDI) of 12% in 2030.
8. Orientation of European funds towards competitiveness and sustainability
This involves the rapid, transparent and effective implementation of European funds; from the push of Portugal 2030 to tradables, scale, innovation, national added value and circularity; the reorientation of the PRR towards companies and the reduction of bureaucracy in the two systems.
The targets are 67% (minimum)30 funds from companies and 100% of eventual reprogramming of subsidies in favor of companies.
However, there are no comparative and dimension studies close to Portugal, such as the historical evolution of the underlying variables in Portugal, such as the historical evolution of the underlying variables in Portugal. exercise of an equally valornometric model not correct arising from a set of a strategy of alignment of ambitious objectives, but structural of a set with ambitious measures”.