Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Portugal
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Portugal, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, housing policy, social policy, stability pact

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   EUROPEAN COMMISSION  Brussels, 4.6.2025  COM(2025) 222 final  Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Portugal {SWD(2025) 222 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic, social, employment, structural and budgetary policies of Portugal 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121(2) and Article 148(4) thereof, 

Having regard to Regulation (EU) 2024/1263 of the European Parliament and of the Council 
of  29 April  2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral 
budgetary surveillance and repealing Council Regulation (EC) No 1466/971, and in particular 
Article 3(3) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

General considerations 

(1) 

Regulation (EU) 2024/1263, which entered into force on 30 April 2024, specifies the 
objectives  of  the  economic  governance  framework,  which  aims  at  promoting  sound 
and  sustainable  public  finances  and  sustainable  and  inclusive  growth  and  resilience 
through reforms and investments, and preventing excessive government deficits. The 
Regulation  stipulates  that  the  Council  and  the  Commission  conduct  multilateral 
surveillance in the context of the European Semester in accordance with the objectives 
and requirements set out in the TFEU. The European Semester includes, in particular, 
the  formulation,  and  the  surveillance  of  the  implementation  of  country-specific 
recommendations.  The  Regulation  also  promotes  national  ownership  of  fiscal  policy 
and  emphasises  its  medium-term  focus,  combined  with  more  effective  and  coherent 
enforcement. Each Member State must submit to  the Council and the Commission  a 
national  medium-term  fiscal-structural  plan,  containing  its  fiscal,  reform  and 
investment  commitments,  over  4  or  5  years,  depending  on  the  length  of the  national 
legislative  term.  The  net  expenditure2  path  in  these  plans  has  to  comply  with  the 

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OJ L, 2024/1263, 30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1263/oj. 
Net  expenditure  as  defined  in  Article  2,  point  (2),  of  Regulation  (EU)  2024/1263:  ‘net  expenditure’ 
means government expenditure net of (i) interest expenditure; (ii) discretionary revenue measures; (iii) 
expenditure  on  programmes  of  the  Union  fully  matched  by  revenue  from  Union  funds;  (iv)  national 
expenditure  on  co-financing  of  programmes  funded  by  the  Union;  (v)  cyclical  elements  of 
unemployment benefit expenditure; and (vi) one-offs and other temporary measures. 

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(2) 

(3) 

(4) 

Regulation’s  requirements,  including  the  requirements  to  put  or  keep  general 
government debt on a plausibly downward path by the end of the adjustment period, or 
for it to remain at prudent levels below 60% of gross domestic product (GDP), and to 
bring  and/or  maintain  the  general  government  deficit  below  the  3%-of-GDP  Treaty 
reference value over the medium term. Where a Member State commits to a relevant 
set  of  reforms  and  investments  in  accordance  with  the  criteria  set  out  in  the 
Regulation, the adjustment period may be extended by up to three years. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council3,  which 
established  the  Recovery  and  Resilience  Facility  (the  ‘RRF’),  entered  into  force  on 
19 February 2021.  The  RRF  provides  financial  support  to  Member  States  for 
implementing  reforms  and  investments,  delivering  a  fiscal  impulse  financed  by  the 
Union.  In  line  with  the  priorities  of  the  European  Semester  for  economic  policy 
coordination, the RRF fosters economic and social recovery while driving sustainable 
reforms and investments, in particular promoting the green and digital transitions and 
making  Member  States’  economies  more  resilient.  It  also  helps  strengthen  public 
finances  and  boost  growth  and  job  creation  in  the  medium  and  long  term,  improve 
territorial cohesion within the Union and support the continued implementation of the 
European Pillar of Social Rights. 
Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council4  (the 
‘REPowerEU  Regulation’),  which  was  adopted  on  27 February 2023,  aims  to  phase 
out the Union’s dependence on Russian fossil-fuel imports. This helps achieve energy 
security  and  diversify  the  Union’s  energy  supply,  while  increasing  the  uptake  of 
renewables,  energy  storage  capacities  and  energy  efficiency.  Portugal  added  a  new 
REPowerEU chapter to its national recovery and resilience plan in order to finance key 
reforms and investments that will help achieve the REPowerEU objectives. 

On 22 April 2021, Portugal submitted its national recovery and resilience plan to the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to Article 19 of that Regulation, the Commission assessed the relevance, effectiveness, 
efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in  accordance  with  the 
assessment guidelines set  out  in  Annex V.  On  13 July  2021, the Council adopted its 
Implementing Decision approving the assessment of the recovery and resilience plan 
for Portugal5, which was  amended under Article 18(2) on 10 October 2023 to update 
the maximum financial contribution for non-repayable financial support, as well as to 
include  the  REPowerEU  chapter6.  The  release  of  instalments  is  conditional  on  the 
adoption  of  a  decision  by  the  Commission,  in  accordance  with  Article 24(5),  stating 
that Portugal has satisfactorily achieved the relevant milestones and targets set out in 
the  Council  Implementing  Decision.  Satisfactory  achievement  requires  that  the 

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6 

the  Recovery  and  Resilience  Facility 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12 February 2021 
establishing 
(OJ  L  57,  18.2.2021,  p. 17,  ELI: 
http://data.europa.eu/eli/reg/2021/241/oj). 
Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27 February 2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in  recovery and resilience plans 
and  amending  Regulations  (EU)  No 1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1, ELI: http://data.europa. eu/eli/reg/2023/435/oj). 
Council Implementing Decision of 13 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Portugal (10149/2021). 
Council  Implementing  Decision  of  10 October  2023  amending  the  Implementing  Decision  of  13 July 
2021 on the approval of the assessment of the recovery and resilience plan for Portugal (13351/23). 

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(5) 

(6) 

(7) 

achievement  of  preceding  milestones  and  targets  for  the  same  reform  or  investment 
has not been reversed. 

On  21 January  2025,  the  Council,  upon  the  recommendation  of  the  Commission, 
adopted a recommendation endorsing the national medium-term fiscal-structural plan 
of Portugal7. The plan was submitted in accordance with Article 11 and Article 36(1), 
point (a), of Regulation (EU) 2024/1263, covers the period from 2025 until 2028 and 
presents a fiscal adjustment spread over four years. 

On  26 November 2024,  the  Commission  adopted  an  opinion  on  the  2025  draft 
budgetary  plan  of  Portugal.  On  the  same  date,  on  the  basis  of  Regulation  (EU) 
No 1176/2011, the Commission adopted the 2025 Alert Mechanism Report, in which 
it did not identify Portugal as one of the Member States for which an in-depth review 
would  be  needed.  The  Commission  also  adopted  a  recommendation  for  a  Council 
recommendation on the economic policy of the euro area and a proposal for the 2025 
Joint  Employment  Report,  which  analyses  the  implementation  of  the  Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights.  The  Council 
adopted  the  Recommendation  on  the  economic  policy  of  the  euro  area8  on  13  May 
2025 and the Joint Employment Report on 10 March 2025. 

On  29 January 2025,  the  Commission  published  the  Competitiveness  Compass,  a 
strategic framework that aims to boost the EU’s global competitiveness over the next 
five  years.  It  identifies  the  three  transformative  imperatives  of  sustainable  economic 
growth: (i) innovation; (ii) decarbonisation and competitiveness; and (iii) security. To 
close  the  innovation  gap,  the  EU  aims  to  foster  industrial  innovation,  support  the 
growth of start-ups through initiatives like the EU Start-up and Scale-up Strategy, and 
promote the adoption of advanced technologies like artificial intelligence and quantum 
computing.  In  pursuit  of  a  greener  economy,  the  Commission  has  outlined  a 
comprehensive Affordable Energy Action Plan and a Clean Industrial Deal, ensuring 
that  the  shift  to  clean  energy  remains  cost-effective,  competitiveness-friendly, 
particularly  for  energy-intensive  sectors,  and  is  a  driver  for  growth.  To  reduce 
excessive dependencies and increase security, the Union is committed to strengthening 
global  trade  partnerships,  diversifying  supply  chains  and  securing  access  to  critical 
raw materials and clean energy sources. These priorities are underpinned by horizontal 
enablers, namely regulatory simplification, deepening of the single market, financing 
competitiveness and a Savings and Investments Union, promotion of skills and quality 
jobs, and better coordination of EU policies. The Competitiveness Compass is aligned 
with  the  European  Semester,  ensuring  that  Member  States’  economic  policies  are 
consistent with the Commission’s strategic objectives, creating a unified approach to 
economic governance that fosters sustainable growth, innovation and resilience across 
the Union. 

(8) 

In  2025,  the  European  Semester  for  economic  policy  coordination  continues  to 
develop  alongside  the  implementation  of  the  RRF.  The  full  implementation  of  the 
recovery and resilience plans remains essential for delivering on the policy priorities 
under the European Semester, as the plans help effectively address all or a significant 
subset  of  challenges  identified  in  the  relevant  country-specific  recommendations 

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Council  Recommendation  of  21 January  2025  endorsing  the  medium-term  fiscal-structural  plan  of 
Portugal, OJ C/2025/641, 10.2.2025. 
Council  Recommendation  of  13  May  2025  on  the  economic  policy  of  the  euro  area  (OJ  C, 
C/2025/2782, 22.5.2025, ELI: http://data.europa.eu/eli/C/2025/2782/oj). 

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issued  in  recent  years.  These  country-specific  recommendations  remain  equally 
relevant  for  the  assessment  of  amended  recovery  and  resilience  plans  in  accordance 
with Article 21 of Regulation (EU) 2021/241. 

(9) 

The  2025  country-specific  recommendations  cover 
the  key  economic  policy 
challenges that are not sufficiently addressed by measures included in the recovery and 
resilience  plans,  taking  into  account  the  relevant  challenges  identified  in  the  2019-
2024 country-specific recommendations. 

in 

(10)  On  4 June  2025,  the  Commission  published  the  2025  country  report  for  Portugal.  It 
assessed  Portugal’s  progress 
country-specific 
recommendations  and  took  stock  of  Portugal’s  implementation  of  the  recovery  and 
resilience plan. Based on this analysis, the country report identified the most pressing 
challenges Portugal is facing. It also assessed Portugal’s progress in implementing the 
European  Pillar  of  Social  Rights  and  in  achieving  the  Union  headline  targets  on 
employment, skills and poverty reduction, as well as progress in achieving the United 
Nations Sustainable Development Goals. 

addressing 

relevant 

the 

Assessment of the Annual Progress Report 

(11)  On 21 January 2025 the Council recommended the following maximum growth rates 
of net expenditure for Portugal: 5.0% in 2025, 5.1% in 2026, 1.2% in 2027, and 3.3% 
in  2028,  which  correspond  to  the  maximum  cumulative  growth  rates  calculated  by 
reference  to  2024  of  17.4%  in  2025,  23.4%  in  2026,  24.8%  in  2027,  and  28.9%  in 
2028. On 30 April 2025 Portugal submitted its Annual Progress Report9, on adherence 
the 
the  recommended  maximum  growth  rates  of  net  expenditure  and 
to 
implementation  of  reforms  and  investments  responding  to  the  main  challenges 
identified  in  the  European  Semester  country-specific  recommendations.  The  Annual 
Progress  Report  also  reflects  Portugal’s  biannual  reporting  on  the  progress  made  in 
achieving its recovery and resilience plan in accordance with Article 27 of Regulation 
(EU) 2021/241. 

(12)  Russia’s  war  of  aggression  against  Ukraine  and  its  repercussions  constitute  an 
existential  challenge  for  the  European  Union.  The  Commission  recommended  to 
activate the national  escape clause of the Stability and Growth Pact  in  a coordinated 
manner to support the EU efforts to achieve a rapid and significant increase in defence 
spending and this proposal was welcomed by the European Council of 6 March 2025. 
Following the request  of Portugal on 30 April 2025, on [date] the Council, upon the 
recommendation of the Commission, adopted a recommendation allowing Portugal to 
deviate  from,  and  exceed,  the  recommended  maximum  growth  rates  of  net 
expenditure10. 

(13)  Based  on  data  validated  by  Eurostat11,  Portugal’s  general  government  surplus 
decreased from 1.2% of GDP in 2023 to 0.7% in 2024, while the general government 
debt  fell  from  97.7%  of  GDP  at  the  end  of  2023  to  94.9%  at  the  end  of  2024. 
According to the Commission’s calculations, these developments correspond to a net 
expenditure  growth  rate  of  12.0%  in  2024.  In  the  2025  Annual  Progress  Report, 

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The  2025  Annual  Progress  Reports  are  available  on:  https://economy-finance.ec.europa.eu/economic-
and-fiscal-governance/stability-and-growth-pact/preventive-arm/annual-progress-reports_en 
Council  recommendation  allowing  Portugal  to  deviate  from,  and  exceed,  the  recommended  net 
expenditure  path  (Activation  of  the  national  escape  clause),  [Please  complete:  OJ  C/2025/xxx, 
x.x.2025]. 
Eurostat-Euro Indicators, 22.4.2025. 

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Portugal  estimates  the  net  expenditure  growth  in  2024  at  11.6%.  The  Commission 
estimates  that  the  net  expenditure  growth  was  higher  than  in  the  Annual  Progress 
Report.  The  difference  between  the  Commission’s  calculations  and  the  estimates  of 
national  authorities  is  due  to  the  higher  revenue-decreasing  impact  of  discretionary 
revenue  measures  estimated  by  the  Commission,  particularly  on  measures  related  to 
personal income tax. Based on the Commission’s estimates, the fiscal stance12, which 
includes both nationally and EU financed expenditure, was expansionary, by 1.6% of 
GDP, in 2024. 

(14)  According to the Annual Progress Report, the macroeconomic scenario underpinning 
the budgetary projections by Portugal expects real GDP growth at 2.4% in 2025, while 
HICP  inflation  is  projected  at  2.4%  in  2025.  The  Commission  Spring  2025  Forecast 
projects real GDP to grow by 1.8% in 2025 and 2.2% in 2026, and HICP inflation to 
stand at 2.1% in 2025 and 2.0% in 2026.  

(15) 

In the Annual Progress Report, the general government surplus is expected to decrease 
to  0.3%  of  GDP  in  2025,  while  the  general  government  debt-to-GDP  ratio  is  set  to 
decrease  to  91.5%  by  the  end  of  2025.  These  developments  correspond  to  net 
expenditure growth of 3.4% in 2025. The Commission Spring 2025 Forecast projects a 
general government surplus of 0.1% of GDP in 2025.  The decrease of the surplus in 
2025  mainly  reflects  the  impact  of  fiscal  policy  measures  estimated  to  increase 
expenditure, notably public wages and social transfers, and reduce revenues resulting 
from  the  update  of  the  youth  personal  income  tax  scheme  and  corporate  income  tax 
incentives.  According 
these  developments 
correspond to net expenditure growth of 6.1% in 2025. These higher projections of net 
expenditure growth than in the Annual Progress Report are due to the Commission’s 
lower  estimated  expenditure  funded  by  transfers  from  the  EU  and  the  non-
classification  as  one-offs  of  court  decision  yet  to  be  materialised.  Based  on  the 
Commission’s  estimates,  the  fiscal  stance,  which  includes  both  nationally  and  EU 
financed expenditure, is projected to be expansionary, by 1.4% of GDP, in 2025. The 
general government debt-to-GDP ratio is set to decrease to 91.7% by the end of 2025. 
The  decrease  of  the  debt-to-GDP  ratio  in  2025  mainly  reflects  a  favourable  interest-
rate growth differential coupled with a projected primary surplus.  

the  Commission’s  calculations, 

to 

(16)  General  government  expenditure  amounting  to  1.5%  of  GDP  is  expected  to  be 
financed  by  non-repayable  support  (“grants”)  from  the  Recovery  and  Resilience 
Facility  in  2025,  compared  to  0.7%  of  GDP  in  2024,  according  to  the  Commission 
Spring 2025 Forecast. Expenditure financed by Recovery and Resilience Facility non-
repayable support enables high-quality investment and productivity-enhancing reforms 
without a direct impact on the general government balance and debt of Portugal.  

(17)  General government defence expenditure in Portugal remained stable at 0.8% of GDP 
from 2021 to 202313. According to the Commission Spring 2025 Forecast, expenditure 
on defence is projected to remain stable at 0.8% of GDP in both 2024 and 2025. This 

12 

The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of 
the  general  government.  It  aims  to  assess  the  economic  impulse  stemming  from  fiscal  policies,  both 
those  that  are  nationally  financed  and  those  that  are  financed  by  the  EU  budget.  The  fiscal  stance  is 
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary 
expenditure net of discretionary revenue measures and including expenditure financed by non-repayable 
support (grants) from the Recovery and Resilience Facility and other Union funds. 

13 

Eurostat, government expenditure by classification of functions of government (COFOG).  

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corresponds  to  no  change  compared  to  2021.  The  period  when  the  national  escape 
clause is activated (2025-2028) allows Portugal to reprioritise government expenditure 
or increase government revenue so that lastingly higher defence expenditure would not 
endanger fiscal sustainability in the medium term.  

(18)  According  to  the  Commission  Spring  2025  Forecast,  net  expenditure  in  Portugal  is 
projected to grow by 6.1% in 2025 and 18.8% cumulatively in 2024 and 2025. Based 
on  the  Commission  Spring  2025  Forecast,  the  net  expenditure  growth  of  Portugal  in 
2025 is projected to be above the recommended maximum growth rate, corresponding 
to  a  deviation14  of  0.4%  of  GDP  in  annual  terms.  When  considering  2024  and  2025 
together, the cumulative growth rate of net  expenditure is also projected to be above 
the  recommended  maximum  growth  rate,  corresponding  to  a  deviation  of  0.5%  of 
GDP. Taking into account the flexibility for higher defence spending provided by the 
national  escape  clause, the cumulative deviation  of net  expenditure  remains  stable at 
0.5% of GDP, below the 0.6% of GDP threshold for the cumulative deviation.  

(19)  Moreover, the Council recommended that Portugal wind down the emergency energy 
support measures before the 2024/2025 heating season. According to the Commission 
Spring  2025  Forecast,  while  the  net  budgetary  cost15  of  emergency  energy  support 
measures is estimated at 0.3% of GDP in 2024, it is projected to decrease to 0.1% in 
2025. The emergency energy support measures were only partly wound down before 
the 2024/2025 heating season. This is not fully in line with what was recommended by 
the Council. 

(20)  The  Annual  Progress  Report  does  not  include  budgetary  projections  beyond  2025. 
Based on policy measures known at the cut-off date of the forecast, the Commission 
Spring 2025 Forecast projects a general government deficit of 0.6% of GDP in 2026. 
The change of the general government balance in 2026 mainly reflects the impact of 
the  reduction  of  the  corporate  income  tax  rate  as  defined  in  the  2025  State  Budget 
Law,  and  the  pick-up  of  public  investment  financed  by  RRF  loans.  These 
developments  correspond  to  net  expenditure  growth  of  6.3%  in  2026.  Based  on  the 
Commission’s  estimates,  the  fiscal  stance,  which  includes  both  nationally  and  EU 
financed expenditure, is projected to be expansionary, by 1.2% of GDP in 2026. The 
general government debt-to-GDP ratio is projected by the Commission to decrease to 
89.7%  by  the  end  of  2026.  The  decrease  of  the  debt-to-GDP  ratio  in  2026  mainly 
reflects  the  continued  favourable  interest-growth  rate  differential  and  the  projected 
primary surplus. 

Key policy challenges 

(21)  Population  ageing  alongside  a  shrinking  working-age  population  puts 

the 
sustainability  of  Portugal’s  pay-as-you-go  pension  system  under  pressure.  While 
public pension spending is expected to increase, there will be fewer contributors into 
the  system.  Public  pension  spending  is  expected  to  peak  in  2046  (15.2%  of  GDP), 
positioning  Portugal  in  the  top  three  Member  States  with  the  highest  pension 
expenditure-to-GDP ratio16. However, if in 2025 there are nearly two contributors per 

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15 

16  

From  2026  these  figures  will  appear  in  the  control  account  that  is  established  in  Article  22  of  the 
Regulation (EU) 2024/1263. 
The figure represents the level of the annual budgetary cost of those measures, including revenue and 
expenditure and, where applicable, net of the revenue from taxes on windfall profits of energy suppliers. 
European Commission, 2024 Ageing Report: Economic and Budgetary Projections for the EU 
Member States (2022-2070), Institutional Paper 279, April 2024. 

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(22) 

pensioner,  in  2046  it  is  expected  there  will  only  be  around  one.  The  ensuing  deficit 
within  the  public  pension  system  balance  would  need  to  be  covered  by  national 
resources  by  means  of  transfers  from  the  national  budget  or  the  Portuguese  reserve 
fund for public pension schemes (known as the Fundo de Estabilização Financeira da 
Segurança  Social).  Population  ageing  weighs  on  Portugal’s  public  finances  not  only 
through its impact on the public pension system but also through its impact on the tax 
system.  For  instance,  a  lower  number  of  working-age  individuals  could  decrease 
revenues from  labour taxation.  In  recent  years,  Portugal  has implemented reforms  to 
improve the sustainability of its pension system by, for example, indexing the statutory 
retirement  age  to  life  expectancy.  Nonetheless,  policies  such  as  early  retirement 
schemes  and  special  contributory  rates  add  pressure  to  the  country’s  public  pension 
system, which could impact its sustainability. 

In accordance with Article 19(3), point (b), of Regulation (EU) 2021/241 and criterion 
2.2  of  Annex  V  to  that  Regulation,  the  recovery  and  resilience  plan  includes  an 
extensive set  of mutually reinforcing  reforms and investments  to  be implemented by 
2026.  These  are  expected  to  help  effectively  address  all  or  a  significant  subset  of 
challenges  identified  in  the  relevant  country-specific  recommendations.  Within  this 
tight timeframe, finalising the effective implementation of the recovery and resilience 
plan,  including  the  REPowerEU  chapter,  is  essential  to  boost  Portugal’s  long-term 
competitiveness  through  the  green  and  digital  transitions,  while  ensuring  social 
fairness. To deliver on the commitments of the recovery and resilience plan by August 
2026,  it  is  essential  for  Portugal  to  accelerate  the  implementation  of  reforms  and 
investments by addressing relevant challenges. On 13 May 2025, the Council adopted 
its  Implementing  Decision  amending  the  assessment  of  the  recovery  and  resilience 
plan  for  Portugal  to  take  into  account  objective  circumstances  compromising  the 
timely implementation of some investments. However, challenges remain in terms of 
administrative  capacity,  public  procurement  rules  and  lengthy  permitting  procedures 
affecting, in particular, large investment projects. The systematic involvement of local 
and regional  authorities, social partners,  civil  society and other relevant  stakeholders 
remains  essential  in  order  to  ensure  broad  ownership  for  the  successful  and  timely 
implementation of the recovery and resilience plan. 

(23)  The implementation  of cohesion  policy programmes,  which encompass support from 
the  European  Regional  Development  Fund  (ERDF),  the  Just  Transition  Fund  (JTF), 
the European Social Fund Plus (ESF+) and the Cohesion Fund (CF), has accelerated in 
Portugal. It is important to continue efforts to ensure the swift implementation of these 
programmes, while maximising their impact on the ground. Portugal is already taking 
action under its cohesion policy programmes to boost competitiveness and growth. At 
the  same  time,  Portugal  continues  to  face  challenges,  including  those  relating  to 
boosting  competitiveness, 
including  by  developing  or  manufacturing  critical 
technologies,  skills  shortages  and mismatches, increasing  water resilience, especially 
in  Algarve  and  in  Alentejo  and  housing  affordability  and  availability.  In  accordance 
with  Article  18  of  Regulation  (EU)  2021/1060,  Portugal  is  required  –  as  part  of  the 
mid-term review of the cohesion policy funds – to review each programme taking into 
account,  among  other  things,  the  challenges  identified  in  the  2024  country-specific 
recommendations.  The  Commission  proposals  adopted  on  1  April  202517  extend  the 

17 

Proposal  for  a  REGULATION  OF  THE  EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL 
amending  Regulations  (EU)  2021/1058  and  (EU)  2021/1056  as  regards  specific  measures  to  address 
strategic challenges in the context of the mid-term review - COM(2025) 123 final 

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deadline for submitting an assessment – for each programme – of the outcome of the 
mid-term review beyond 31 March 2025. It also provides flexibilities to help speed up 
programme  implementation  and  incentives  for  Member  States  to  allocate  cohesion 
policy resources to five strategic priority areas of the Union, namely competitiveness 
in strategic technologies, defence, housing, water resilience and energy transition. 

(24)  The  Strategic  Technologies  for  Europe  Platform  (STEP)  provides  the  opportunity  to 
invest in a key EU strategic priority by strengthening the EU’s competitiveness. STEP 
is channelled through 11 existing EU funds. Member States can also contribute to the 
InvestEU  programme  supporting  investments  in  priority  areas.  Portugal  could  use 
these initiatives to support the development or manufacturing of critical technologies, 
including clean and resource-efficient technologies. 

(25)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan and other EU funds, Portugal faces several additional challenges related to: i) the 
sustainability  of  its  pension  system,  ii) simplification,  iii) business  environment, 
iv) research  and  innovation,  v)  access  to  finance  and  growth  financing,  vi) tax 
law  making, 
administration, 
viii) transport, ix) renewable energy, x) energy infrastructure and networks, xi) energy 
efficiency,  xii)  environmental  policy,  xiii)  resource  management,  xiv)  housing, 
xv) skills, xvi) quality jobs and xvii) social fairness. 

tax  avoidance,  vii) quality  of 

tax  evasion  and 

(26)  As  set  in  the  Competitiveness  Compass,  all  the  EU,  national,  and  local  institutions 
must  make  a  major  effort  to  produce  simpler  rules  and  to  accelerate  the  speed  of 
administrative  procedures.  The  Commission  has  set  ambitious  goals  for  reducing 
administrative burden: by at least 25% and by at least 35% for SMEs; and has created 
new  tools  to  achieve  these  goals,  including  systematic  stress  test  of  the  stock  of  EU 
legislation and enhanced stakeholders’ dialogue. To match this ambition, Portugal also 
needs  to  take  action.  51%  of  businesses  consider  the  complexity  of  administrative 
procedures  to  be  a  problem  for  their  company  when  doing  business  in  Portugal18. 
Despite  the  progress  made  over  recent  years,  administrative  and  regulatory  burdens 
remain  a  major  constraint  to  the  operation  of  businesses  in  Portugal.  Over  83%  of 
Portuguese firms report business regulation as an obstacle to investment, compared to 
66% in the EU. Furthermore, the assessment of the OECD product market regulation 
indicators for 2023 and 2024 classifies Portugal as the ninth worst performer out of 38 
OECD  countries.  These  barriers  weigh  on  the  attractiveness  of  the  Portuguese 
markets,  reduce  competition  and  undermine  Portuguese  firms’  capacity  to  expand, 
innovate  and  boost  their  productivity.  In  particular,  firms  continue  to  report  long 
industrial  licensing  and  permitting  procedures,  which  they  consider  to  be  a  major 
barrier  to  investment.  Despite  some  progress  made  in  shortening  and  streamlining 
these processes, local authorities face difficulties in implementing the new procedures, 
and  practices  can  differ  significantly  across  regions  and  municipalities.  Barriers  also 
remain  on  access  to  several  retail  and  professional  services,  even  if  Portugal  made 
some significant steps forward, for instance by reviewing the legal regimes for several 
self-regulated professions between 2023 and 2024. 

(27)  The conditions for firms that are trying to access finance have been improving over the 
last few years and the proportion of firms reporting access to finance as a constraint to 
investment  is  now  broadly  in  line  with  the  EU  average.  However,  Portuguese  firms 
rely  predominantly  on  bank  loans  and  internal  funding.  Other  sources  of  financing, 

18 

‘Businesses' attitudes towards corruption in the EU’ Flash Report, Eurobarometer Report (April 2024). 

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such as venture and equity capital,  have been increasingly  adopted over  the last few 
years but remain markedly less common than for the EU average. Portuguese capital 
markets remain underdeveloped, and account only for 24.4% of GDP, compared to an 
average of 67.6% at EU level. The Portuguese authorities launched and strengthened 
several initiatives to support investment in private equity and venture capital, such as 
the  capitalisation  and  resilience  fund  managed  by  Banco  Português  de  Fomento, 
programmes  supporting  start-ups  or  targeting  specific  sectors,  as  well  as  the  recent 
review of the capital markets code. However, further progress is needed for Portugal to 
catch  up  with  European  peers  and  attract  more  private  equity  investors  and 
investments, possibly including public-private risk sharing, to target firms with higher 
growth potential and sectors with strong productivity profiles. More widespread use of 
equity  instruments  would,  among  other  things,  support  start-ups  and  innovation, 
increase  local  firms’  capacity  to  scale  up  and  expand  their  operation,  improve 
managerial  practices  and  boost  productivity.  Financial  literacy  in  Portugal  is  weak 
and,  in  the  2023  Eurobarometer  financial  literacy  survey,  only  16%  of  Portuguese 
received  a  ‘high’  score,  the  second  worst  result  in  the  EU.  Financial  literacy  in  the 
country  could  be  improved  to  enable  a  more  effective  allocation  of  savings  and  to 
improve  firms’  understanding  of  the  specific  benefits  and  risks  of  each  available 
financing instrument. 

(28)  Tax  expenditures  are  widespread  in  the  Portuguese  tax  system.  There  are  more  than 
500  tax  expenditures  over  several  different  legal  texts.  This  instrument  can  be  an 
effective  tool  to  achieve  specific  policy  objectives.  Nonetheless,  it  also  results  in 
foregone  revenue,  contributes  to  the  tax  system’s  complexity  and  could  have 
implications  for  income  inequality.  Portugal  took  a  first  step  in  tackling  its  large 
number  of  tax  expenditures  by  setting  up  a  new  tax  policy  unit  (known  as  U-TAX) 
that  aims  to  monitor  and  evaluate  tax  expenditures.  The  design  of  the  corporate 
income tax adds to the complexity of the tax system. Its rate structure is composed of 
both a state tax and municipal surtaxes. The state tax depends on the amount of each 
firm’s taxable profits. On top of this, municipalities can set a surtax of up to 1.5%. As 
a result, the statutory rate of the corporate income tax can vary from 12.5% to 30.5%, 
depending  on  a  firm’s  size  and  location.  This  design  could  also  disincentivise  firms 
from scaling up, hindering greater economies of scale and associated efficiency gains, 
while  increasing  the  scope  for  profit  shifting  within  the  country.  In  terms  of  the  tax 
administration,  Portugal’s  outstanding  tax  arrears  relative  to  GDP  remain  one  of  the 
highest in the EU. 

(29)  The  justice  system  is  becoming  more  efficient  but  continues  to  face  challenges  with 
lengthy proceedings and a sizeable backlog of cases, in particular in the administrative 
and  tax  courts.  It  will  be  important  for  Portugal  to  continue  making  progress  in 
reducing the backlog of pending cases, as well as their duration, in both first-instance 
and second-instance courts, and to ensure the availability of adequate resources for the 
justice system. 

(30) 

Investment in research and development has picked up over recent years but remains 
insufficient  for  the  Portuguese  national  research  and  innovation  system  to  catch  up 
with the EU average. The share of spending on research and development in relation to 
GDP increased to 1.7% in 2024, supported by an increase in private spending, while 
public  research  and  development  intensity  remained  stable  at  0.6%.  Portuguese 
authorities  have  implemented  a  wide  range  of  programmes  to  support  research  and 
innovation. However, several of them, such as the mobilising and green agendas, will 
only  be completed over  the next  few years. While  long  lasting benefits  are expected 

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from  these  programmes,  it  will  be  paramount  for  Portugal  to  sustain  adequate 
incentives to research, development and innovation beyond these programmes. To this 
end,  it  will  be  crucial  to  evaluate  and  implement  sound  policies  and  to  support 
efficient  expenditure  by  targeting  sectors  displaying  the  highest  potential  for  growth  
and value added. 

(31)  On  the  quality  of  law  making,  Portugal  is  only  making  limited  use  of  impact 
assessments and ex post policy evaluations. In 2021, significant progress was made in 
implementing  ex ante  policy  evaluations  in  Portugal,  through  the  establishment  of 
PlanAPP,  a  national  body  to  support  the  development  of  public  policies.  However, 
ex post impact assessments are not common and are limited to selected legislative acts. 
A wider use of ex post evaluations would allow authorities to better gauge the impact 
of  new  policies  and  legislations,  as  well  as  to  assess  the  effectiveness  of  the  ex ante 
evaluations  already  in  place.  Transparency  of  stakeholders’  involvement  in  the 
legislative process could also be improved.  

(32)  Portugal remains highly dependent on imported fossil fuels, with oil and gas making 
up  47.2%  and  16.8%,  respectively,  of  its  energy  mix  in  2023.  The  transport  sector 
accounts for the largest share of final energy consumption representing 37.5% of the 
total. The transport sector is heavily reliant on oil and petroleum products, which make 
up  92%  of  its  final  energy  consumption,  highlighting  the  country’s  significant 
dependence  on  fossil  fuels.  Portugal  records  sizeable  fossil-fuel  subsidies  without  a 
planned phase-out before 2030. In particular, fossil-fuel subsidies that address neither 
energy  poverty  in  a  targeted  way  nor  respond  to  genuine  energy  security  concerns, 
hinder  electrification  and  are  not  crucial  for  industrial  competitiveness  could  be 
considered  a  phase-out  priority. In  Portugal,  fossil-fuel  subsidies  such  as  tax 
reductions  and  exemptions  for  diesel  for  freight  companies  and  public  transport  are 
economically inefficient, perpetuate reliance on fossil fuels and disincentivise the shift 
to  electric  vehicles  and  other  sustainable  solutions.  Investing  in  sustainable  mobility 
and  railway  infrastructure  that  ensures  seamless  integration  with  the  EU  network 
would  accelerate  decarbonisation,  build  resilience,  reduce  regional  disparities,  and 
foster social cohesion. 

(33)  Portugal  has  been  adopting  legislation  to  ease  permitting  procedures.  However,  the 
legislation is still too complex, particularly with regard to spatial planning at national, 
regional  and  local  levels,  with  a  lack  of  standardised  rules  and  clear  guidelines. 
Portugal’s public authorities lack the tools to continuously monitor the implementation 
of  legislation  and  track  the  progress  of  renewable  energy  plants  and  often  lack  the 
necessary  technical  skills  to  evaluate  the  projects.  The  number  of  renewable  energy 
communities in Portugal is still low, and there is scope to facilitate their licensing and 
create  incentives  schemes.  To  accelerate  the  take-up  of  renewables,  Portugal  could 
continue  to  follow  up  on  the  progress  it  made  over  recent  years  on  streamlining  its 
permitting  process,  including  by  increasing  the  capacity  of  the  public  administration 
dealing  with  permitting,  increasing  digitalisation  in  renewables  production  and 
consolidating  the  overall  regulatory  framework.  Further  action  to  promote  self-
consumption (including rooftop solar) and renewable energy communities would also 
be  beneficial.  In  2023,  Portugal’s  renewable  energy  sources,  driven  by  hydropower 
and strong winds, supplied 87.7% of the country's electricity, achieving a new record. 
Solar was the renewable source that increased most, going up by 36%. The significant 
increase in the share of renewable energy played a role in the significant decrease in 
electricity  prices,  which  fell  below  pre-crisis  levels.  As  more  renewables  are 
integrated, and as electrification of demand proliferates, further investments to expand 

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to  streamline  connection  procedures, 

and  upgrade  the  electricity  grid,  promote  fossil-free  solutions  such  as  storage  and 
demand-side response, and further digitalise the grid will be essential to safeguard the 
balance of the electricity grid and to ensure more stability in the electricity wholesale 
market.  The  lack  of  transparency  around  available  distribution  grid  capacity  and 
expansion plans makes it difficult for developers to plan and invest in new projects. It 
increase  grid  connection 
is  essential 
transparency, and provide a clear, long-term  auction  planning framework. Moreover, 
logistical  challenges,  component  shortages,  and  lower  profitability  have  hindered 
renewable projects, leading to delays in implementation. Incentives to further develop 
long-term contracts such as power purchase agreements (PPAs) would also help make 
the  market  more  stable  by  increasing  long-term  sustainability  and  therefore 
attractiveness  of  renewables  investments.  However,  renewable  PPAs  are  limited  in 
Portugal  at  present,  with  0.42 GW  contracted.  Despite  efforts  made  by  Portugal  to 
increase  the  electricity  interconnection  level  with  Spain,  this  level  of  electricity 
interconnection is still below 2030 targets.  

(34)  A high share of the Portuguese population experiences energy poverty. To address its 
high degree of reliance on fossil fuels in buildings and to reduce energy consumption, 
Portugal could accelerate its efforts on energy efficiency beyond what is set out in its 
recovery  and  resilience  plan.  Stepping  up  efforts  to  incentivise  deep  renovations, 
including by delivering technical assistance to applicants, could accelerate the take-up 
of  energy  efficiency  renovation  projects.  In  addition,  Portugal  could  benefit  from  a 
strengthened framework for financial schemes to make best use of private investment 
for  energy-efficient  renovation.  By  doing  so,  Portugal  could  target  more  grant-based 
resources towards households in need. 

(35)  Portugal  is  far  below  the  EU  average  for  circular  economy  benchmarks,  as  well  as 
targets for resource productivity in industries and waste management indicators, with 
marked regional differences. The average municipal recycling rate is particularly low 
(30.1%  in  2023,  far  from  the  EU  target  of  55%  by  2025)  and  varies  by  region. 
Portugal’s  circular  use  of  materials  had  a  rate  of  2.8%  in  2023,  well  below  the  EU 
average  of  11.8%.  Some  progress  has  been  made  through  initiatives  and  regulations 
both  at  national  and municipal  levels. Support  from  EU funds and the private sector 
will  be  critical  to  meet  recycling  and  circular  economy  targets,  including  through: 
i) investment  in  infrastructure  for  separate  waste  collection,  ii)  development  or 
adaptation  of  waste  treatment  facilities, and  iii) technological  upgrades to  enable the 
pay-as-you-throw tariff scheme to be rolled out nationwide. 

(36)  Portugal, especially in its southern regions, is heavily affected by natural hazards, such 
as droughts, fires and flooding, with increased frequency and intensity due to climate 
change.  Reduced  annual  rainfall,  water  scarcity  and  increased  temporal  variability 
affect river flows, aquifer recharge, and flood risk, impacting many economic sectors, 
such  as  agriculture,  drinking  water  production,  and  energy  generation,  including 
hydropower,  while  undermining  the  sustainability  of  public  finances  through 
escalating  costs.  Portugal  has  increased  its  capacity  to  adapt  to  climate  change, 
including  by  developing  sectoral  adaptation  plans.  In  2024,  Portugal  finalised  a 
national  roadmap  for  adaptation  to  climate  change  until  2100,  but  it  would  be 
important  to  further  incorporate  climate  adaptation  into  water  management  policies. 
By implementing an integrated and sustainable water management strategy, including 
the recent ‘Water that Unites’ strategy, Portugal could ensure that key sectors will still 
have  access  to  water,  while  also  securing  sufficient  and  good  quality  water  for 
ecological  functions,  particularly  for  sensitive  and  biodiverse  ecosystems,  such  as 

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wetlands.  Streamlining  the  governance  structure  of  the  water  sector  would  also  help 
achieve effective coordination between national, regional and local levels. To improve 
water  management,  further  investments  in  wastewater  collection  and  treatment, 
reduction  of  leaks  in  the  networks  and  improved  monitoring  (of  water  quantity  and 
quality) are crucial. Special attention could be paid to: i) restoring the natural sponge 
function of the landscape; ii) reducing ground water extraction; ii) restoring wetlands 
and  rivers,  including  flood  plains;  and  iv)  rolling  out  other  nature-based  solutions. 
Moreover, Portugal could take advantage of the potential of water reuse. 

(37)  Portugal still faces challenges in access to healthcare and its long-term care system is 
not  prepared  for  a  rapidly  ageing  population.  Overall,  the  country’s  health  system 
performs comparatively well, and Portugal has been implementing significant reforms, 
including reforms in primary healthcare and mental healthcare, as well as a reform of 
the  governance  model  of  the  hospitals  of  the  National  Health  Service.  Portugal  has 
also  been  investing  in  healthcare  infrastructure  and  services  across  the  country, 
including under its recovery and resilience plan. However, the National Health Service 
continues  to  face  significant  shortages  of  healthcare  workers,  with  an  impact  on 
accessibility to healthcare services, for example, long waiting times and uneven access 
between  income  groups  and  between  regions  across  the  country.  Between  2020  and 
2024,  only  around  half  of  the  positions  opened  to  recruit  doctors  for  the  National 
Health Service were filled and the country faces a considerable amount of emigration 
among its graduate nurses. Despite some efforts taken in recent years to promote the 
attractiveness of careers in the National Health Service, there is scope for simplifying 
and  speeding  up  recruitment  procedures  in  order  to  promptly  hire  the  necessary 
professionals  and  to  continue  attracting  healthcare  workers.  In  addition,  almost  a 
quarter of the Portuguese population is aged 65 or over, with a lower than EU average 
score on heathy life years,  and public investment in long-term care being lower than 
the EU average, and coverage rates in long-term care remaining low across all regions. 
Despite an increase in recent years, the workforce is not sufficient to keep up with the 
demand, leading to a heavy reliance on informal carers. By addressing these aspects, 
while  preserving  the  sustainability  of  the  National  Health  Service,  Portugal  could 
promote more years of quality life for its population and ensure that the care needs of 
the elderly are met. 

(38)  Skills mismatches are an obstacle to competitiveness and productivity. The supply of 
skills does not match the market needs, which contributes to sectoral labour shortages, 
including in information and technology fields. The low availability of staff with the 
right skills is a major obstacle reported by companies. The mismatches also fuel high 
levels of youth unemployment (21.6% in 2024, compared to 14.9% in the EU), with 
many young people in unemployment holding either qualifications that are too low or 
qualifications in areas of low employability in the country. Portugal could also benefit 
from  a  reliable  forecast  of  future  market  needs  that  could  help  inform  a  better 
alignment between the higher education offer and the market, as well as inform career 
choices. In addition, the development of the skills required for an evolving economy is 
further hindered by the declining adult participation in lifelong learning (from 38% in 
2016 to 33% in 2022). Despite recent measures encouraging adults to enrol in learning 
and training, including investments under the Portuguese recovery and resilience plan, 
there  is  scope  for  businesses  and  companies  to  further  engage  in  skilling  and 
upskilling  activities  and  promote  a  culture  of  adult  learning  in  the  country. 
Furthermore,  Portugal’s  population  continues  to  generally  have  low  levels  of 
qualifications  (in  2023,  around  41%  of  people  aged  25-64  had  a  low  educational 
attainment level, well above the EU average of 24.7%), which is a chronic barrier to 

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productivity in the country. However, recent years have shown significant progress in 
increasing  the  qualification  levels  of  the  population.  To  sustain  this  progress,  the 
country  could  benefit  from  addressing  the  increased  share  of  early  leavers  from 
education and training in recent years (from 6% in 2021 to 8.1% in 2023). 

(39)  House  prices  in  Portugal  have  been  rising  consistently,  outpacing  the  EU  average 
increase over the past decade. High demand in large cities and popular tourism areas 
has  largely  driven  increases  in  prices  and  rents,  with  stark  differences  compared  to 
interior regions. This situation impacts labour mobility and availability, also affecting 
the prospects of young people. The lack of  affordable housing is also resulting in an 
increased  number  of  people  experiencing  homelessness  or  living  in  informal 
settlements.  Portugal  is  implementing  measures  to  expand  its  social  and  affordable 
housing  stock,  yet  shortages  remain  significant.  At  the  same  time,  persistently  low 
construction  rates  over  recent  years  have  restricted  the  supply  of  new  homes  at 
affordable  prices.  A  large  stock  of  empty  houses  and  derelict  buildings  –  around 
700 000  –  presents  an  opportunity  to  incorporate  more  housing  into  the  market, 
especially  in  constrained  areas.  In  addition,  Portugal  could  benefit  from  promoting 
more  efficient  public  transportation  solutions  and  investing  in  the  attractiveness  of 
other  territories  to  reduce  the  pressure  on  constrained  areas.  Ultimately,  addressing 
Portugal’s  housing  challenges  will  require  a  comprehensive  approach,  as  solutions 
focused  on  increasing  supply  need  to  go  hand-in-hand  with  measures  that  integrate 
demand-side dynamics and incentives into both the rental and ownership markets. 

(40) 

In view of the close interlinkages between the economies of euro-area Member States 
and  their  collective  contribution  to  the  functioning  of  the  economic  and  monetary 
union,  in  2025,  the  Council  recommended  that  the  euro-area  Member  States  take 
action,  including  through  their  recovery  and  resilience  plans,  to  implement  the  2025 
the  euro  area.  For  Portugal, 
Recommendation  on 
the  economic  policy  of 
the  first  euro-area 
implement 
recommendations  (2),  (3),  (4)  and  (5)  help 
recommendation  on  competitiveness,  while  recommendation  (3),  (4)  and  (5)  help 
implement  the second  euro-area recommendation on resilience,  and  recommendation 
(1)  and  (5)  helps  implement  the  third  euro-area  recommendation  on  macroeconomic 
and financial stability set out in the 2025 Recommendation. 

HEREBY RECOMMENDS that Portugal take action in 2025 and 2026 to: 

1. 

2. 

3. 

Reinforce overall defence spending and readiness in line with the European Council 
conclusions  of  6  March  2025.  Adhere  to  the  maximum  growth  rates  of  net 
expenditure recommended by the Council on 21 January 2025, while making use of 
the allowance under the national escape clause for higher defence expenditure. Take 
action to ensure the medium-term fiscal sustainability of the pension system. 

In  view  of  the  applicable  deadlines  for  the  timely  completion  of  reforms  and 
investments  under  Regulation  (EU)  2021/241,  accelerate  the  implementation  of  the 
recovery  and  resilience  plan,  including  the  REPowerEU  chapter.  Accelerate  the 
implementation  of  cohesion  policy  programmes  (ERDF,  JTF,  ESF+,  CF),  building, 
where  appropriate,  on  the  opportunities  offered  by  the  mid-term  review.  Make 
optimal use of EU instruments, including the scope provided by the InvestEU and the 
Strategic Technologies for Europe Platform, to improve competitiveness. 

Simplify  regulation,  improve  regulatory  tools  and  reduce  administrative  burden  on 
businesses,  mainly  by  reducing  barriers  to  industrial  licensing  and  removing  other 
obstacles to their capacity to scale up and boost innovation and productivity. Foster 
private  investment  into  venture  capital  and  private  equity  for  local  businesses, 

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including  public-private  risk  sharing,  and  improve  financial  literacy.  Increase  the 
efficiency  of  administrative  and  tax  courts,  to  decrease  the  length  of  proceedings. 
Improve  the  effectiveness  of  the  tax  system,  particularly  by  strengthening  the 
efficiency  of  its  administration  and  reducing  the  associated  administrative  burden. 
Foster evidence-based policy making including by conducting  ex post public policy 
evaluations. Sustain the focus of investment-related economic policy on research and 
innovation.  Strengthen  stakeholders’  involvement  and  increase  transparency  in  the 
preparation of public policies. 

Reduce overall reliance on fossil fuels in the transport sector in particular by phasing 
out fossil-fuel subsidies, and by investing in sustainable transport, particularly in rail, 
taking into account regional disparities. Further accelerate the roll-out of renewables 
by  providing  a  predictable,  regulatory  framework  with  clear  and  digital  procedures 
for  permitting  including  for  collective  self-consumption  and  renewable  energy 
communities. Enhance stability in the electricity market through long-term contracts, 
investment in energy storage capacities and demand-side response tools. Strengthen 
the capacity of the electricity transmission and distribution grid, improve connection 
procedures and increase their transparency to incentivise investments in the national 
network. Step up policy efforts aimed at the provision and acquisition of skills, and 
competences  needed  for 
the  public 
administration.  Accelerate  investment  in  energy  efficiency  by  promoting  financial 
schemes to attract private investment and supporting households experiencing energy 
poverty.  Improve  the  conditions  for  the  transition  towards  a  circular  economy, 
particularly  by  increasing  waste  prevention,  recycling  and  reuse  to  reduce  landfill 
and  incinerator  waste.  Improve  water  management  to  strengthen  climate  change 
adaptation and ensure long-term economic and environmental resilience. Implement 
an integrated water management strategy and streamline water governance. Promote 
investments in wastewater collection and treatment, the reduction of leaks and water 
monitoring,  develop  nature-based  solutions,  water  body  rehabilitation  and  improve 
water efficiency and reuse. 

transition,  particularly  for 

the  green 

Ensure  equal  access  to  quality  health  and  long-term  care,  while  preserving  the 
sustainability  of  the  National  Health  Service.  Address  skills  mismatches  by 
improving  the  skills  level  of  the  population  and  by  making  education  and  adult 
learning  more  relevant  to  the  needs  of  the  labour  market.  Address  housing 
affordability and availability in high demand areas, by eliminating barriers to renting 
vacant  houses  and  renovating  derelict  buildings  and  promote  efficient  public 
transport  connections  to  reduce  the  pressure  on  house  prices  in  urban  centres  and 
improve the attractiveness of other territories. 

4. 

5. 

Done at Brussels, 

For the Council 
The President 

EN 

14 

  EN