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Country Profile | Portugal

Country Profile | Portugal
26 November 2019

Through a total of 16 national programmes, Portugal has been allocated €25.85 billion from ESI funds for the duration of the 2014-2020 Multiannual Financial Framework; an additional national contribution of €7.15 billion take Portugal’s total budget to €33 billion. This budget is intended to be used to:

  • Improve entrepreneurship and business innovation, and fostering small and medium-sized enterprises’ access to finance;
  • Increase economic competitiveness by boosting the production of tradable goods and services;
  • Boost research and development by promoting knowledge transfer between academia and businesses; 
  • Strengthening innovation systems in enterprises;
  • Tackle unemployment by improving the quality of education and training, and matching skills and labour-market demand;
  • Reduce poverty by improving access to services and supporting the social economy, social innovation and social entrepreneurship;
  • Assist in the shift to low-carbon and resource efficient economy; 
  • Promote sustainable fishing practices;
  • Support the maritime economy and labour markets in coastal areas;
  • Develop knowledge transfer and innovation in resource efficient agriculture and rural development;
  • Contribute to the modernisation of public administration through capacity building and e-governance.

 

The Portuguese government is investing more than €7.5 billion to improve the competitiveness of small and medium enterprises, including in the agriculture and fisheries sectors, in order to develop the sector and better place the companies in the global market. As shown by Chart 1, the investments in this field are carried out thanks to the European Regional Development Fund (ERDF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF). The largest share comes from the ERDF, with more than €6 billion, the rest is assigned by the EAFRD (€1.7 billion) and EMFF (€310 million). Another very relevant theme of investments for Portugal is the improvement of quality of educational and vocational training for the Portuguese. With the goal of tackling unemployment, the European Social Fund (ESF) has assigned to Portugal almost €4.7 billion, while the ERDF and the Youth Employment Initiative contributed with €660 million combined.

 

Special attention is also paid by the Portuguese government to environmental protection and resource efficiency. For this topic, the ERDF, EAFRD and Cohesion Fund (CF) allocated a budget of around €1.2 billion each, while the EMFF assigned just €100 million. 

To fully understand the EU funding budget of the Portuguese government, Chart 2 gives an overview of the total available budget divided into the shares that each European Fund has in the total budget of €33 billion.

 

 

With 45.1% of the total budget, the European Regional Development Fund (ERDF)  is the largest contributor to European funding in Portugal, granting almost €15 billion alone, distributed in all the important themes of investments of the Portuguese agenda. The second largest contributor is the European Social Fund (ESF), that accounts for 26.7% and a total €8.8 billion being invested in creating new jobs, upskilling workers and promoting social inclusion between different social groups. The European Agricultural Fund for Rural Development (EAFRD) has a total share of 15% and is investing around €5 billion in the competitiveness of SMEs, and in environmental and social issues. The Cohesion Fund (CF) is also relatively important in the overall budget, contributing with €3.3 billion and a share of 10.2%. With around €500 million each and a share of just 1.5%, the EMFF and YEI are the smallest contributor of EU funding to Portugal. 

The country’s absorption rates are high, especially when compared to other southern European countries. With a 41% share of spent funding from the ESIF, Portugal has one of the highest percentages among southern countries, and is also 13% above the European average of 28%, meaning that almost 14 billion have already been invested in various initiatives. Portugal is also very effective when it comes to assigning funds: in fact, the country has allocated 88% of its total budget, 23% above the EU average of 65%, meaning that 29 billion have been assigned to projects and other initiatives. These data when compared to the results of 2018 show that the country has gradually improved, increasing its EU funding implementation data by 4% (spent funding) and 5% (assigned funding), further confirming the fact that Portugal is very efficient when it comes to absorption of funding.

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