“The Recovery and Resilience Facility, which funds the Recovery and Resilience Plans (PRR), should have been the transformative force to achieve digital transition, but this opportunity was not well utilized,” argues the European Court of Auditors (ECA) in a report released today.
The digital component of the Recovery and Resilience Facility, amounting to 150 billion euros of the total 650 billion euros (2022 values), is currently the largest source of financing for the European Union’s (EU) digitalization. However, according to the ECA, there was a lack of “strategic focus, as Member States were not compelled to prioritize these funds for measures addressing the main previously identified digital needs.”
“Thus, some Member States allocated a smaller part of their Recovery and Resilience Facility funding to areas where their performance was insufficient, thereby reducing their potential to effectively contribute to the digital transition,” the EU auditor adds in its report.
The regulation of this mechanism, created to assist EU countries in recovering from the economic impacts of the COVID-19 pandemic, stipulated that national PRRs should allocate 20% of their funding to digital reforms and investments, and this was “correctly implemented,” according to the ECA.
However, “we also found that the performance framework and indicators used to monitor progress were not well aligned with those of the EU digital strategy, limiting their ability to measure the true contribution of these reforms and investments to the digital transition,” the court adds, noting that this potential “may not be fully assessed.”
According to the ECA’s data referenced in the report, regarding the funding allocated to digital measures in national PRRs, by December 2023, Portugal was the fourth EU country with the least allocated funds, totaling 4.5 billion euros (equivalent to 21% of the Portuguese plan).
In the digital sector, Portugal’s PRR includes 2,460 milestones and 926 measures related to the digital area, with a current execution rate of 25%.
“The digital challenges for Portugal include the need to invest in the digital transition, particularly in developing both basic and advanced digital skills, using digital technologies to ensure equal access to quality education and training, and to enhance the competitiveness of businesses. This is especially relevant in Portugal, where the economy is characterized by microenterprises concentrated in traditional sectors,” according to the European Commission’s website on Portugal’s PRR.
Overall, the plan is valued at 22.2 billion euros, with 16.3 billion euros in grants and 5.9 billion euros in loans from the Recovery and Resilience Facility, covering 376 investments and 87 reforms.
Currently, the country has already received 8.49 billion euros in grants and 2.9 billion euros in loans, with a plan execution rate of 32%.
