State of implementation of the RRP reforms

The aim of this paper is to characterize the state of implementation of the reforms set out in Portugal’s Recovery and Resilience Programme (RRP), approved in July 2021. The PRR is a financing mechanism based on performance and the verification of results achieved: before each disbursement, the European Commission assesses compliance with the objectives (milestones and targets) associated with the measures (reforms and investments) relating to each disbursement request. This initial RRP of Portugal was organised in 20 thematic components, which were grouped into three structuring dimensions (Resilience, Climatic Transition and Digital Transition), and provided for the disbursement of €16.6 billion subject to compliance with 115 measures, including 32 reforms (which have 57 associated objectives, of which more than four fifths are measured through qualitative indicators). Based on the compilation of the available information on the implementation of the RRP reforms, prior to its reprogramming, we conclude that the execution rate of the objectives associated with those reforms was of 65% in the end of December 2023. This rate rises to 84 per cent if we only consider the objectives that should have been completed by the end of that year. Regarding these latter objectives, seven were yet to be finalised, including the three objectives that the European Commission, in its preliminary assessment of the 3rd and 4th payment requests, considered to be unfinished, which led to the partial suspension of RRP funds to Portugal. Although the focus of this analysis is the initial RRP, we also give note of the updated Portuguese RRP, approved in October 2023, following which the number of components, measures and objectives was revised upwards, while total financing increased to €22.2 billion.