This summer has been one of the most frenetic in the history of Azorean politics.

Government officials have been working at a feverish pace to complete the Recovery and Resilience Plan (PRR), while the opposition has been equally determined not to be left behind: over the past two months, Chega has issued nearly one hundred press releases, while the more restrained Socialist Party did not quite reach fifty.

It must be acknowledged that the implementation of the PRR was a success, contrary to the expectations of the opposition parties—even though several projects, still unfinished, will now have to be completed with funds from the Regional Budget, placing additional pressure on already fragile public finances.

Fulfilling the programme is important; more important still, however, is the quality of the investment.

The PRR was poorly conceived from the outset by the previous government, and the present administration adopted the document without undertaking any substantial reformulation.

An excessive proportion of the investment has been directed towards public administration—which will generate further expenditure—to the detriment of productive investment, which creates added value.

Having reached this point, the fundamental question now facing citizens is a simple one: to what extent will all this investment be reflected in household finances, in the creation of wealth across all the islands, and in the development of businesses?

Ordering vehicles and equipment for the healthcare sector, while waiting lists continue to lengthen, or erecting yet more concrete structures that will require additional maintenance expenditure, is not enough to correct the productivity deficits confronting us throughout every sphere of public life.

José Manuel Bolieiro’s government is already preparing next year’s Plan and Budget, which will probably be among the most difficult ever to manage, given the scarcity of revenue and the mounting costs of servicing the debt.

Indeed, it is almost certain that the burden of interest payments on the public debt will increase next year as a consequence of inflation and the corresponding rise in interest rates.

The Azores currently pay average interest rates ranging from 2.8% to 4%, depending on the financial operation, with a total annual cost of between €73 million and €80.6 million.

It is true that part of the debt is protected by fixed interest rates, but another substantial portion remains exposed to fluctuations in Euribor.

On the revenue side, the anticipated economic slowdown will bring less money into the public coffers, beginning with the sharp decline in tourism.

Between January and July, we had already lost approximately 90,000 overnight stays—equivalent to 27,000 tourists—a precipitous decline confirming that, by the end of the year, its economic impact will entail a loss of more than €150 million to the regional economy.

The government’s calamitous strategy—with Visit Azores once again adrift because its president is on leave—will have a negative impact on regional GDP and on the finances of citizens and businesses alike.

Compounding this situation, the government has already confirmed that next year we will lose more than €50 million in revenue because of the preposterous per-capita VAT allocation rule imposed by the Regional Finance Law, whose revision Luís Montenegro has quietly consigned to a drawer.

It is hardly surprising, therefore, that the Regional Government is under immense pressure as it prepares the next budget. It has already warned that it will once again turn to the banks next year, contracting a further €160 million in debt—and it is entirely foreseeable that matters will not end there.

All this means that, once the fireworks surrounding the PRR have faded, difficult days will lie ahead for everyone.

We are about to enter the so-called low season, marked by a sharp contraction in the sector that generates the greatest share of our wealth. It is highly probable that some tourism and restaurant businesses will be forced to reassess their operations during the winter. There is already talk of a possible wave of temporary layoffs, or of the Regional Government establishing a support programme for vocational training to contain the temptation to eliminate jobs.

Azorean families are heading towards a difficult period, judging by the warning signs the regional economy has been emitting for some time.

The Azores Economic Activity Indicator has been slowing month after month since January and currently stands at a paltry 0.2%—its lowest level in several years.

Even with the PRR, the Azorean economy is languishing and inflation is rising. If economic activity continues along this sustained path of deceleration, as is anticipated during the low season, three consecutive months of negative figures will be sufficient for the economy to be officially declared in recession.

Worst of all, we are moving against the economic tide of the rest of the country, where the economy is growing—as it is in Madeira—without the alarming levels of indebtedness in which we remain mired.

Something is going profoundly wrong in the Azores.

I fear that the searching reflection demanded of all those responsible for the Region is being neglected, while everyone remains preoccupied with celebrations commemorating fifty years of Autonomy and six hundred years since the discovery of the Azores, absorbed in their own self-regard.

It is the spectacle of official celebration severed from the realities of everyday life.

Osvaldo Cabral
September 2026

(Açoriano Oriental, Diário Insular, Portuguese Times [USA], LusoPresse Montreal)

Osvaldo Cabral is an emeritus journalist with over 40 years of experience covering the Azores. He was the director of RTP-A (the public television station) and the Diário dos Açores newspaper. He is a regular columnist for many newspapers throughout the Azpres and the Diaspora.

NOVIDADES will feature occasional opinion pieces from various leading thinkers and writers in the Azores, providing the diaspora and those interested in the current state of the Azores with insight into the diverse opinions on some of the archipelago’s key issues.