The global deficit recorded in 2020 represents an increase of 163 million euros and practically triples the global budget deficit recorded in 2019, before the pandemic.

This and other figures are published in the Report and Opinion on the Accounts of the Autonomous Region of the Azores for 2020, prepared by the Court of Auditors and which formulates “a judgment with reservations, emphases and recommendations” and considers that the Region's Accounts for 2020 “are affected by limitations of scope and materially relevant errors and omissions”. The Report and Opinion was presented in the city of Horta by the president of the Court of Auditors, José Tavares, to the president of the Regional Parliament, Luís Garcia.

In its Opinion, the Court of Auditors considers that “budgetary developments in 2020 have increased the sustainability risks of regional public finances”, warning of “the significant worsening of the budget deficit and regional public debt, reflecting the effects of the Covid-19 pandemic”, which emerged in a context in which regional public finances already exhibited a structurally deficit budgetary position”.
The Court of Auditors reveals that the debt of the regional public administrative sector - which is within the budgetary perimeter - suffered “an unprecedented boost in 2020”, worsening by at least 369 million euros, which represents an increase of 17.4% compared to 2019, for a total debt that amounted to 2490 million euros at the end of the year.
The Court of Auditors also reveals that the debt of regional public entities outside the budgetary perimeter, in turn, accumulated a debt of 1015 million euros at the end of 2021, which corresponds to an increase of 21% compared to 2019.
The Report and Opinion of the Court of Auditors also warns of the “high” future contractual liabilities of the Region and of a “debt repayment profile that shows a high temporal concentration of amortizations in the coming years”, an aspect “likely to condition the principle of intergenerational equity and to aggravate refinancing risks and debt costs”.
Thus, the Court of Auditors states that the Region has financing needs of 1213 million euros until 2023, “essentially due to the high amounts of regional public debt to be refinanced, with annual values ranging from 255.2 to 303.1 million euros”.

 
In addition, the Court of Auditors mentions that around 75% of the stock of regional public debt, amounting to 1666 million euros, reaches maturity by 2027, at the same time as the costs of Public-Private Partnerships (PPP) and cooperation contracts with local authorities will amount to a total of 624 million euros until 2043.

The Court of Auditors also draws attention to the fact that the regional public administrative sector transferred 149.5 million euros last year to regional public companies not included in the budget, with Grupo SATA companies obtaining 122.1 million euros of this total.

In its Report and Opinion on the Accounts of the Autonomous Region of the Azores for 2020, the Court of Auditors also draws attention, in the case of public companies not included in the budgetary perimeter, to the effects of the Covid-19 pandemic, which accentuated “the risks implicit in contingent liabilities with potential impact on the regional budget, highlighting in this context the growing exposure to Grupo SATA, with guaranteed credits amounting to 197 million euros”.

Given this scenario, the Court of Auditors warns that, although it is expected that, under the NextGenerationEU - the popularly known European 'bazooka' -, the Region benefits, by 2026, from European funds estimated at around 580 million euros, mostly non-refundable, “it should be borne in mind that these resources are cyclical, so they will have an essentially conjunctural impact on the Region's budgetary position, without structural consolidation”.

Therefore, the Court of Auditors “emphasizes the need to adopt measures to correct the structural imbalance of regional public finances, in order to bring the budget balance back to a sustainable position in the long term, compatible with the stabilization of regional public debt”. Finally, the Court emphasizes “the importance of promoting a strategy that favors the smoothing of the debt repayment profile, with the aim of mitigating the risks of refinancing and debt costs”.

Cited by Agência Lusa, the president of the Court of Auditors, José Tavares, expressed “concerns” about the increase in regional public debt, although acknowledging that the Covid-19 pandemic contributed to this increase.