Europe: Investment news in Portugal

The European Commission has advised against general corporate income tax cuts, labeling them an inefficient way to stimulate investment. In its 2026 Annual Fiscal Report, the commission suggests that Portugal should instead focus on targeted measures such as investment tax credits and accelerated depreciation to support technological and energy transitions.

Prime Minister Luís Montenegro announced at the NATO summit in Ankara that Portugal has met the alliance's target of investing 2% of its GDP in defense for the first time. The government now aims to reach 3.1% of GDP in defense spending this year. Former Assembly of the Republic President Augusto Santos Silva also expressed support for a new NATO mission focused on maritime security in the Arctic.

Eurostat data shows Portugal experienced one of the highest monthly inflation increases in the Eurozone during April, rising by 1.9%. Experts suggest that volatility in international oil markets, particularly tensions near the Strait of Hormuz, is contributing to higher energy and food costs for families.

The European Commission and the European Parliament are preparing a potential response to United States President Donald Trump's threat to impose 25 percent tariffs on European-manufactured cars and trucks. While the Commission stated it is keeping its options open, European officials rejected Trump's accusations that the EU violated a trade deal reached last summer. The German automotive industry has also called for the immediate opening of negotiations to resolve the dispute.

The European Commission has intervened in the Lisbon Metro expansion project, forcing the consortium led by Mota-Engil to replace a Chinese subcontractor with a Polish supplier. The decision follows an investigation which determined that the Chinese firm, CRRC, benefited from unfair foreign subsidies. This ruling affects the construction of the new Violet Line, which is designed to connect Lisbon to the municipalities of Odivelas and Loures.

Over 30 members of the European Parliament, including João Oliveira of the Communist Party (Partido Comunista Português or PCP) and Catarina Martins of the Left Bloc (Bloco de Esquerda or BE), have written to European Commission President Ursula von der Leyen and European Council President António Costa. They are requesting an extension of the Recovery and Resilience Plan (Plano de Recuperação e Resiliência or RRP) deadline to 2028, citing rising costs and procurement difficulties.

Internal documents from the European Parliament suggest Portugal may see a 12% reduction in its national funding envelope for the 2028-2034 budget cycle. The cut results from a new EU architecture that merges the Common Agricultural Policy (Política Agrícola Comum) and cohesion funds into a single strategic plan. Residents should note that this reduction could impact long-term public investment in infrastructure and regional development.

Valdis Dombrovskis wrote in ECO that the European economy needs less bureaucracy and more focus on growth, arguing redundant regulation raises costs and deters investment. He says the European Commission's wide simplification programme aims to make rules work better for citizens and businesses. Business owners and those interacting with EU rules should watch upcoming simplification measures that may affect cross-border paperwork and compliance.