EU Vice-President Fitto Visits Lisbon and Azores to Shape Next Round of Cohesion Funding for Portugal

European Commission Vice-President Raffaele Fitto arrived in Portugal on Wednesday for a three-day visit focused on the future of EU cohesion policy and the bloc's strategy for its outermost regions — a trip that comes as Brussels begins to draft the next long-term budget covering 2028 to 2034.

Fitto, who holds the cohesion and reforms portfolio, is scheduled to meet Foreign Affairs Minister Paulo Rangel and Economy and Territorial Cohesion Minister Manuel Castro Almeida in Lisbon, before travelling to the Azores to meet the regional government president José Manuel Bolieiro. A meeting with Lisbon Mayor Carlos Moedas is also on the agenda.

Next Budget Cycle at Stake

The visit is framed around discussions on the new investment framework for EU cohesion spending under the next multiannual financial framework (MFF), which will replace the current 2021–2027 cycle. For Portugal, the stakes are high: the country has been one of the largest per-capita recipients of EU structural funds since joining the bloc in 1986, and any changes to the cohesion formula could significantly affect the flow of investment into infrastructure, digitisation, and regional development.

According to the European Commission, Portugal has already reallocated more than EUR 2.5 billion in existing cohesion funds to new EU priorities during the current programming period. Of that, EUR 1.2 billion was redirected toward competitiveness initiatives and EUR 700 million toward housing — reflecting the acute affordability crisis that has dominated Portuguese domestic politics over the past two years.

Projects on the Ground

In Lisbon, Fitto is visiting initiatives developed under Portugal's Drainage Plan, funded with EU cohesion money, as well as a Recovery and Resilience Plan (PRR) project that is developing an artificial intelligence robot for agricultural applications.

In the Azores, the vice-president will visit two EU-funded projects: a social housing development and a facility for integrated urban waste treatment. Both reflect longstanding challenges in Portugal's autonomous regions, which benefit from additional EU funding streams available to the bloc's nine outermost regions.

The Outermost Regions Question

The Azores leg of the visit is particularly significant. The archipelago, along with Madeira, holds special status as an EU outermost region (RUP), which entitles it to specific funding, derogations on state aid rules, and tailored treatment in areas such as agriculture, fisheries, and transport.

As the Commission prepares its proposals for the post-2027 period, there is growing debate about whether the outermost regions framework needs updating to reflect new challenges — including climate adaptation, energy transition, and demographic decline — that have intensified since the current rules were designed.

Mid-Term Review Shows Shifts

The Commission noted that Portugal's mid-term review of its cohesion allocation resulted in a substantial reallocation of funds. The shift of EUR 700 million toward housing is one of the largest such redirections in the EU and underscores how rapidly the policy environment has changed since the original programming was agreed in 2021.

At that time, Portugal's priority was post-pandemic recovery and green transition. By 2024, the housing emergency had overtaken both as the most politically urgent issue, forcing the government to redirect EU money toward a crisis that barely featured in the original national plans.

Fitto's visit to Portugal follows similar consultations in other member states as the Commission builds the case for its budget proposal, expected to be presented later this year. The outcome will determine how much EU investment Portugal can count on for the remainder of the decade.