The Legislative Assembly of the Autonomous Region of the Azores, in its plenary session in June, approved the 2023 Regional Budget, with votes in favor from the PSD (22), CHEGA (5), CDS-PP (2), and PPM (1), votes against from the PS (22), and abstentions from the sole representatives of the IL, PAN, and BE political parties. The debate focused on budget results, the balance between economic growth and fiscal responsibility, and the Government’s guidelines for public spending.

The Regional Secretary for Finance, Planning, and Public Administration, Duarte Freitas, praised “the most dynamic period in the history of the Azores’ economy,” but stressed that this context cannot detract from “a path of responsibility.”

“It is at this moment that we must call on each and every one of us to reflect on how to ensure the sustainability of public accounts and the continued progress of the Region, not least because, fortunately, we are in the most dynamic period in the history of the Azores’ economy,” said the Regional Secretary. He recalled that the Region’s deficit was 2.5%, below the 3% benchmark, and that the public debt ratio did not exceed 60% of Gross Domestic Product.

“We must remember that resources are finite, we must have the capacity and responsibility to assess the quality of our public spending. This must be done by all of us, naturally by the Government, but also by this parliament,” he concluded.

For his part, PSD/Azores deputy Joaquim Machado said that the 2023 Account ”confirmed the best investment ever made, with 508 million euros.” He pointed out that “the Region invested, every day, €220,000 more than the Socialist Party ever did,” emphasizing that “not adding new debt” and renegotiating maturities resulted in “benefits for the Region, particularly in terms of interest.”

The Social Democrat also pointed out that “some of the recommendations from the time of the Socialist government have only now been overcome,” and that “very firm choices in key areas such as health and education” confirm “the quality of spending.” He also noted that the budget rejected by the PS included increases in family allowances, regional pension supplements, and aid for the purchase of medicines.

The vice president of the PS Parliamentary Group, Carlos Silva, warned of “serious signs of budgetary mismanagement and failure to fulfill commitments by the Regional Government.” According to the socialist, “in 2023, the region’s total debt exceeded €3.315 billion, with a significant increase in debt to suppliers of €100 million in just one year.”

Carlos Silva added that the deficit of 2.5% of GDP is “out of step with the rest of the country” and that “a deficit of €146 million is not prudent management of expenditure.” He also noted that the execution of EU funds was half of what was planned and that public investment fell by €9 million compared to 2022. He stated that “the Region’s accounts suffer from the same problems as the Government itself: lack of credibility; lack of rigor; lack of control and non-compliance with the law.”

CHEGA deputy Francisco Lima said that “the growth of debt, deficits, unpaid bills, and debts inherited by the PS” explains much of the region’s financial situation. The parliamentarian called for a restructuring of the administration: “we have to put an end to redundancies and offices where the bosses are the only employees.” He announced that the party is preparing “an ambitious project to reduce the size of the state apparatus”. He pointed out that “the Azoreans are the same, but the apparatus has grown by more than 50%,” referring to the increase in the number of civil servants between 1996 and 2020.

CDS-PP deputy Pedro Pinto stressed that “the region’s current financial situation continues to be marked by past decisions,” particularly in the case of SATA. He argued that “it was not this government [PSD/CDS/PPM] that created this problem, but it is this government that has shown the will and responsibility to solve it.” He argued that “there was political courage” in reducing taxes “when many said it was not possible,” and that “the tax reduction was not just a technical measure,” but “a political sign and a sign of confidence in the people.” He also pointed out that “despite the tax cuts, there was an increase in net tax revenue of around 5% in 2023.” He also said that the revision of the Regional Finance Law is “the right way forward.”

The Liberal Initiative deputy, Nuno Barata, argued that either the region becomes more prudent in managing its public spending or the current generation of government officials will regret the legacy of debt. He highlighted the interest charges: “We have €57 million in interest, which would be enough to pay for the Modular Hospital. In the 2024 accounts, we will have €72 million in interest, which would be enough to build a new hospital from scratch. We will most likely regret leaving future generations with the serious problem we have at the moment,” he said. He also highlighted “the call for parsimony from his fellow members of the government, but above all a call for parsimony from the parliamentary groups that support the government.” Nuno Barata also stated that “regional public spending between 2020 and 2025 increased by 242 million euros.”

The Left Bloc deputy, António Lima, criticized the “zero debt” policy, stating that “the regional government is failing in its commitments, it owes workers, it owes suppliers, it owes half the world in the region.” He blamed the PSD’s budgets, with the support of CHEGA, for the current financial situation. The Bloco deputy also said that “today, and increasingly, we hear talk of debts to suppliers, associations, sports clubs, and even workers.” He pointed out that future financial liabilities have increased from 3.6 billion in 2020 to 4.6 billion in 2023. He considered that “financial responsibility and concerns for future generations have disappeared from the government’s agenda.” He also expressed concern about the “continuous underfunding of the Regional Health Service, which shows no signs of abating,” and the situation of SATA, “which was going to be saved by the right-wing government, supported by CHEGA, but which is now heading for a precipice,” he concluded, as quoted.

In Correio dos Açores-Natalino Viveiros, director

Translated to English as a community outreach program from the Portuguese Beyond Borders Institute (PBBI) and the Modern and Classical Languages and Literatures Department (MCLL) as part of Bruma Publication and ADMA (Azores-Diaspora Media Alliance) at California State University, Fresno, PBBI thanks Luso Financial for sponsoring NOVIDADES.