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Portugal's president to allow caretaker government to pursue projects with EU funds

Published 02/12/2023, 17:41
Updated 02/12/2023, 17:46
© Reuters. FILE PHOTO: Portugal's President Marcelo Rebelo de Sousa addresses the 78th Session of the U.N. General Assembly in New York City, U.S., September 19, 2023.  REUTERS/Brendan McDermid/File Photo

By Sergio Goncalves

LISBON (Reuters) - Portugal's president said on Saturday that the outgoing government would next week formally become a caretaker administration, unable to make long-term policy decisions, but he would approve decrees to ensure access to EU recovery funds.

Prime Minister Antonio Costa resigned on Nov. 7 over an investigation into alleged illegalities in his government's handling of "green" energy projects and a large-scale data centre.

Prosecutors are also investigating Costa, who denied any wrongdoing.

His resignation, leading to President Marcelo Rebelo de Sousa deciding to dissolve parliament on Jan. 15 and calling an election for March 10, left the country facing months of uncertainty.

The president said on Saturday that, after the cabinet meeting on Dec. 7, which "will approve fundamental decisions for the Portuguese economy", he will formally decree the resignation of the government and it will act as a caretaker government from Dec. 8 until the election.

From then, the government must limit its action to acts of day-to-day management and decisions of an administrative nature, but Portuguese constitutional law allows room for some discretion, as long as it is accepted by the president.

"Everything related to EU recovery funds, I will be very open and generous (in approving the projects). We cannot lose the application of millions of euros," the president told reporters.

Portugal has already received 2.7 billion euros in EU post-pandemic recovery funds, but needs to accelerate the approval of projects that qualify for such aid if it is to make use of the 22 billion euros on offer by the 2026 deadline.

Only 12% of the funds have been deployed so far.

Experts said that Portuguese green energy investments and large railway investments that require European Union funds are among the projects at risk of being derailed.

© Reuters. FILE PHOTO: Portugal's President Marcelo Rebelo de Sousa addresses the 78th Session of the U.N. General Assembly in New York City, U.S., September 19, 2023.  REUTERS/Brendan McDermid/File Photo

Costa's government predicted that renewables - from hydrogen to offshore wind - could attract investments worth 60 billion euros ($65.29 billion), or 25% of the country's GDP, much of that from foreign investors.

($1 = 0.9190 euros)

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