Recently, I wrote about the celebrations within the Regional Government regarding an increase in the GDP of the Azores. It seemed that, for a brief amnesic period, everyone forgot the region is close to bankruptcy. Let us see:

In 2019, when the region was still governed by the socialist party, the deficit stood at €26.5 million. This was, therefore, the legacy left by the PS, which governed the region for over 20 years.

At the end of 2020, José Manuel Bolieiro took over the leadership of the Azores regional government, in a coalition that brought together the Social Democratic Party (PSD), the old Social Centre Democratic Party (CDS) and the Monarchic Party (PPM).

In just five years of coalition government, the region’s deficit has skyrocketed to €219.6 million! Almost ten times more! This shows that the policies adopted by these coalition governments over the past five years are contributing to a tremendous hole in the region’s financial health and stifling all the potential development and investment that is essential for the region. However, the lifeline that the coalition government has been clinging to is called the PRR (Recovery and Resilience Plan), so much so that the Region’s Budget for 2026 focuses on PRR projects, leading to cuts already announced in several areas not covered by PRR money. This right-wing government has not even spared the word “Azores”!

When a government has run out of money, it can’t pay its suppliers who have employees, who have families, Important sectors are under-funded: University of the Azores; schools and the education system; public libraries and cultural centers; health; ecological management; SATA; maritime connections between the islands; and the list goes on.  

But the big question that needs to be clarified is how we got to this scenario? What could have led to this disastrous result?

Well, back in 2021, José Manuel Bolieiro’s government decided it was essential to give 30% tax breaks to all income tax brackets (including the highest incomes), to the Additional Solidarity Tax (applied to incomes above €80,000/year), and to the profits of Azorean companies. In other words, the government decided to cut direct tax revenue, hoping that indirect tax would work miracles.

 “One euro in the pockets of the Azoreans is better than in the government’s coffers,” said Bolieiro.

It is now quite clear how much the coffers are lacking and the impact this has on the lives of the Azoreans, who every day resist the law of the jungle implemented in the region, with the cost of living increasingly unsustainable and major limitations on access to health care and housing.

Unlike the Azores, the Autonomous Region of Madeira in 2025 (also led by a right-wing government) closed with a surplus of €106.7 million.

Are the policies implemented by regional governments in the autonomous regions really so different? Yes, they are because in Madeira, the regional government did not grant 30% tax breaks on personal income tax to the top three income brackets (highest incomes), nor did it grant any extra tax breaks under the Additional Solidarity Tax. The regional government of Madeira applied the same tax rate as on the mainland.

However populist these tax measures may be, they always have consequences for the management of the economy and the entire society. Those who suffer are those who have the least, because if access to housing, health, and the cost of living was already difficult for this population in 2019, imagine what it will be like in 2026. Those who earn the least were not the principal beneficiaries of Bolieiro’s policies, but rather those with the highest incomes, who now contribute less to ensuring better public services, undermining the essential proportionality required of the tax system.

The inexperience and populism of the Azores coalition governments are leading the region into an increasingly unsustainable situation. No matter how much propaganda they spread, no matter how much they try to say that the economy is growing, that more wealth is being generated in the region, what we see and what the numbers show us is the complete erosion of the economy and that this fiscal policy has severe and all too clear impacts on Azorean society and in all sectors of the economy.

Avelina da Silveira is a poet, novelist, and political activist in the Azores, where she resides after living in Canada.

NOVIDADES will feature occasional opinion pieces from leading thinkers and writers in the Azores, providing the diaspora and those interested in the current state of the Azores with a sense of the significant perspectives on some of the archipelago’s issues.