Algarve can get the European funds from the PRR that it has “escaped” for a long time

João Bernardo Duarte, researcher and professor at Universidade Nova SBE, gave an interview to Sul Informação

The Recovery and Resilience Plan (PRR) is a golden opportunity for companies and entities in the Algarve to have access to European Union cohesion funds that have been closed to them for a long time, assured the Sul Informação João Bernardo Duarte, researcher and professor at Universidade Nova SBE, co-author of the study “European Structural and Investment Funds (FEEI) – Impact Assessment in different regions in Portugal”.

The researcher urges Algarve companies to pay attention to the PRR warnings, as it could be the opportunity to find funding for “riskier” projects, thanks to the European Union’s non-refundable co-participation.

The Algarve has been, since 2007, in phasing out of the so-called Convergence Goal of the European Union, where the poorest regions are, as they already have a GDP per capita above 75% of the Union average, but because it has not yet exceeded 90%, the threshold above which it enters the “club” of the richest regions.

This means that the Algarve has almost no access to cohesion funds, intended to encourage the poorest regions to converge economically with the richest, for more than a decade.

As for the study on the impact of the funds, it determined that «the poorest regions in Portugal haveThey would be even further away from the richest in the country and the EU average in the period 2014-2020».

But the investigation also made it clear that, in the five years before the pandemic, the Algarve “was the only region in Portugal that would have converged in relation to the richest regions of the European Union, even without European funds”, as João Bernardo Duarte says in this article. interview.



Sul Informação (YES): The Algarve is a very specific region, in phasing out, which, as such, does not have access to the same resources as most, so I guess that this study will have had some interesting results in relation to this region. Explain to me the conclusions you reached.

Joao Bernardo Duarte (JBD): As I said, the Algarve is one of the regions, like the Lisbon Metropolitan Area, that are already a little more advanced, that are a little closer to the reality of the European Union average and, therefore, it does not have, by no means the same access to the European Structural Funds of the European Commission.

In this way, the impact of funds in the Algarve is reduced, because the support that reaches the region is also reduced.

This does not mean that the Algarve makes less good use of these funds, there is just less support, less volume reaching the Algarve.

But, according to the data up to 2019, which is what we have, we still don’t have 2020 – and this is very important to mention, because we know that the Algarve, due to the strong weight of tourism, was one of the regions that also suffered the most. with the Covid-19 pandemic -, the Algarve was the only region in Portugal that would have converged in relation to the richest regions of the European Union, even without the funds, because it had a very strong growth engine from 2014 to 2019, as probably is known to everyone.

But in 2020, there it is, there was certainly a divergence here from the richer regions, due to the weight of tourism in the Algarve, greater than in other regions of the European Union. Therefore, it is natural that the Algarve has moved further away in 2020 than other regions.

However, even with this drop, I do not believe that the Algarve will be below 75% of the average GDP per capita of the European Union, so that it has access to more European funds, since it is already very close to 90% [percentage above which a region becomes one of the most developed and richest in the EU and has no access to cohesion funds]. I believe that the region will continue to have the same type of access to funds in Portugal 2030.

However, the Algarve will have access, as already determined, to the Recovery and Resilience Plan. As we know and I stress again, the Algarve was greatly affected by the pandemic, it is natural that it also has privileged access to these funds.

Therefore, it will continue to have little access to Portugal 2030, the next multi-annual framework, but it will have access to the PRR, in what will be a different opportunity for the use of European funds in the coming years.

I would like to emphasize this issue of the PRR, because often companies, as they are not used to it, think that there is nothing for them in terms of funds. But there may be a different window of opportunity here, one worth taking advantage of.

A large part of the PRR funds are allocated to non-refundable funds, although there is always a part that is not reimbursed.

This can help companies to bet on a slightly riskier project, which they would not otherwise go ahead with. It could be an opportunity to take a little more risk.


SI: He told me that with the tree of the tourism that took place between 2014 and 2019, the Algarve came even closer to 90% of the European average. However, for the third Community Support Framework followed, the Algarve region will remain in transition. Do you believe that, from 2030, this can change?

JDB: I think so, if we go back to a pre-Covid trend and everything indicates that it will happen. I think there were some people a little more pessimistic, during the pandemic, when it comes to the resumption of tourism. Today, from what has been said and seen of companies, the post-Covid recovery has been quite good and fast,

But I believe that if we quickly resume pre-Covid trends - and discounting, of course, problems of war, inflation and all these economic problems -, I believe that the Algarve will continue with a good growth trajectory in order to pass, without a doubt, the have higher living standards and become classified as a developed region of the European Union.


SI: As already mentioned, the Algarve has lost not total access, but almost total access to cohesion funds. However, it has access to other funds and other means of financing from the European Union. What would be the best strategy to take advantage of them? What funds can the region access?

JDB: Exactly. To the structural funds, which include ERDF, the Cohesion Fund, the Social Fund, the Algarve with little access. And this happens because these are the European Structural Funds, which are made for the less developed regions, for example, the Centro region, the Alentejo region and the Autonomous Region of the Azores, which are well below 75% of the average GDP per capita. European.

The objective of these funds is to boost these regions, in order to create a homogeneity of economic development throughout the European Union. So the Algarve really has little access to these funds.

But, to give you an idea, the Algarve, already without much access to Portugal 2020, which started in 2014 and can be executed until 2023, was almost 80% of the European Union average, in 2014, and, after five years, it was almost by 90%. We are talking about almost 10 percentage points in just 5 years. And this without support from European funds [for cohesion].

That is why I say that, if there is a slight recovery of what was the tourism trend between 2014 and 2019, it is obvious that the Algarve will continue to converge with the rest of the European Union, even without the help of funds.

Now, there are European funds in the PRR – which is behind schedule, the funds are yet to be launched in the operational programs -, to which the Algarve will have access. Agents in the region must be aware and take advantage of these funds.

And why is it important for the Algarve to be aware? It's because, compared to other regions, as you didn't have much access to Portugal 2020, companies may not be so oiled to be aware of these warnings. As they did not receive a large contribution from European Union funds for their investment projects, it is possible that they lost attention to these cohesion funds. But it is good that they are attentive to the PRR, because they will have access to these funds and I think that this can leverage these companies.



SI: In the Algarve, there is an issue that has to do with the imbalance between the coast and the interior, in terms of development. Much of the territory has a level of development similar to Baixo Alentejo. Can the PRR be decisive for this territorial cohesion?

JDB: Of course yes. In fact, despite the few funds that reach the Algarve, areas like Monchique and Alcoutim, for example, have received more funds, given their level of development – ​​although, again, they were less than in the rest of the country.

But there was this differentiation within the Algarve region, without a doubt, as we found out in a specific study on the Algarve region, which we recently released. The other more developed areas of the region received practically zero [from the cohesion funds].


SI: The reality of the Algarve is completely different from that of the Alentejo, which, without the structural funds, would even have regressed. What analysis can be made in relation to the Alentejo region?

JDB: The situation in Alentejo is much more worrying, because when we “uncover”, so to speak, when we take the funds, we notice that there is little left.

The Alentejo, without the funds, would have been further away, not only from the Lisbon metropolitan area, from the Algarve itself and from the more developed regions of the country, but also from the European Union average. The funds undoubtedly played a critical role in the Alentejo region, but also in the Autonomous Region of the Azores, the two that most depend on structural funds for growth.


SI: Do structural funds need to be used differently in the future?

JDB: I think not. I mean, our study even makes a positive analysis, in the sense that they have been well used. The indicators are very high, the money seems to be staying in the regions and that is very important. It's not just projects that are created and then the capacity disappears from the region, that's not it. It stays and lasts over time and continues to bear fruit, with increased productivity in the following years.

What is more worrying is what are the conditions for growth, outside of what is the support of funds. And the Algarve seems to have solid foundations for growth. Therefore, funds, even if they existed, would be nothing more than a push, while in Alentejo and Azores this is not the case. What worries me is that in these regions, without the funds, it seems that there is no investment capacity.