According to Executive Digest, the head of the Portuguese Government began by placing the situation in a global context, stressing that “the world that several generations of Portuguese people have known has changed”. The Prime Minister shared that measures have already been prepared to respond to the impacts of tariffs and retaliatory charges in a package worth more than 10 billion euros.

Montenegro warned that “deterrence and defence capabilities are essential”, not only for security but also as a foundation for economic development and the sustainability of the welfare state. “It may seem distant, but the growing instability and uncertainty”, exemplified by wars and cyber attacks, “affect the economy and the security of the Portuguese people”, he declared, adding: “Economic growth and security are at stake and require a sense of responsibility”.

Defence

In one of the main developments of the briefing, Montenegro announced that Portugal will bring forward the Defence investment target of 2% of GDP, a commitment made in 2014 within NATO and initially scheduled to be met by 2029. “Portugal cannot continue to postpone investment in Defence”, argued the Prime Minister, adding that this commitment should be understood “not as a cheque being written, but as an investment”.

The anticipation of this objective represents, in the words of the Government leader, an “opportunity” for the country. The executive intends to strengthen national production and boost export capacity, particularly in the area of ​​technology applied to Defense. In this regard, Montenegro highlighted the potential of sectors such as the latest generation drones, the aeronautical sector and the maritime sector.

National strategy for the defence industry

The Prime Minister also revealed that the Ministers of Finance, Economy, Defence and Territorial Cohesion are working “closely” on an “ambitious” strategy for the defence industry. This strategy aims to boost the national economy and create jobs and will include an appeal to “broad national political consensus”.

Relations with the US

In the external sphere, Montenegro highlighted the “solid friendship and intense political and economic relationship” between Portugal and the United States, recalling that both countries are founders of NATO and that there is a bilateral defence agreement between them. However, the Prime Minister did not hide his concern about the recent increase in US tariffs, which have since been suspended for 90 days.

“The increase in tariffs that the US started to apply but has suspended threatens global economic growth and could lead to a trade conflict that benefits no one,” Montenegro warned, welcoming the 90-day pause as a sign that “this is no time for rash statements.”

Montenegro called for negotiations to continue within the European Union and warned that the suspension of tariffs is only temporary: “We have to do our homework at home and on a European scale,” he said, recalling that “general protectionism weakens international economic relations.”

Impact on the Portuguese economy

The Prime Minister warned that financial markets are already reacting with instability to the tariff threat, anticipating the negative effects that the measures could have on the lives of people and companies. Portugal, he said, is an “open economy” whose growth is based on exports to diversified markets, and some of these exports “may be directly affected”, while the national economy could suffer “indirect effects”.

Faced with this scenario, Montenegro announced that the Government is preparing a response “on two levels”: an external level, with European coordination, and an internal level, with national measures aimed at the most affected sectors. “In both levels, in-depth knowledge, prudence and firmness are required”, he warned, stressing that “impulsive reactions only exacerbate problems”.

The Portuguese government has been maintaining “daily communication with the European Commission and European partners” in recent weeks. Now that the US measures are known, the European Union, according to Montenegro, is preparing “an appropriate response, which reflects European unity, a robust and proportional response and the defence of the interests of the Member States”.

Support package worth over 10 billion euros

Following “intense contacts” with European partners and national economic sectors, the Prime Minister announced that the Government has prepared a package of support measures worth “more than 10 billion euros”, which will be presented shortly by the Minister of Economy.

This package, he explained, will include measures to mitigate the impact of the tariff crisis while also aiming to strengthen the competitiveness of Portuguese companies. Montenegro made a promise: “We will do our homework to increase the competitiveness of our economy and protect the most vulnerable sectors.”

The package includes:

  • Banco de Fomento Line: A new line of credit of over 5 billion euros, with competitive guarantees, simple applications and automatic contracting, will allow companies to strengthen their working capital and investment capacity. The minister stressed that the model includes pre-approvals to facilitate access and speed up the response to companies' urgent needs.
  • A €3.5 billion support line, with maturities of four and 12 years, part of which may be converted into non-refundable support and grants, was presented as a way of “reinforcing capital” for national companies. Pedro Reis highlighted that this measure is especially important for companies most exposed to the volatility of international markets.
  • Strengthening credit insurance: The Government will increase ceilings by 1.2 billion euros to cover export risks, not only in emerging markets but also in traditional markets. Policies and premiums will also be subsidised, democratising access to these insurances, especially for exporting SMEs. This was a long-standing demand of several business associations.
  • Promoting internationalisation: The fourth axis of the programme focuses on expanding support for internationalisation, allowing companies to participate in more international fairs, strengthen marketing strategies and increase their presence in foreign markets. “It can make a difference,” said the Minister of Economy.