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REGIO/2000/1320-EN

COMMUNITY SUPPORT FRAMEWORK

PORTUGAL

2000 – 2006

24/03/2000

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Contents

CHAPTER I - INITIAL SITUATION ...........................................................................................................4

1. INTRODUCTION ...................................................................................................................................4 2. GENERAL DESCRIPTION AND ECONOMIC SITUATION...............................................................7 3. LABOUR MARKET ...............................................................................................................................9 4. STRUCTURAL ANALYSIS ................................................................................................................12 5. ASSESSMENT OF THE RESULTS OBTAINED BY COMMUNITY SUPPORT FRAMEWORK II (1994-1999) ..........................................................................................................................................................25

CHAPTER II - STRATEGIC GUIDELINES ............................................................................................29

A - GLOBAL STRATEGY ......................................................................................................................29 1. DEVELOPMENT ANALYSIS ............................................................................................................29 2. STRATEGIC OPTIONS AND PRIORITIES .....................................................................................39 3. STRATEGIC GUIDELINES FOR THE DEVELOPMENT OF HUMAN RESOURCES (SUMMARY OF THE FRAME OF REFERENCE) ....................................................................................................................46

B - PRIORITY 1 – IMPROVING SKILLS AMONG THE PORTUGUESE, PROMOTING EMPLOYMENT AND SOCIAL COHESION ................................................................................................................................57

B.1 – EDUCATION ................................................................................................................................57 B.2 – EMPLOYMENT, TRAINING AND SOCIAL DEVELOPMENT ...................................................61 B.3 – SCIENCE, TECHNOLOGY AND INNOVATION ........................................................................66 B.4 – INFORMATION SOCIETY ...........................................................................................................69 cB.5 – HEALTH......................................................................................................................................74 cB.6 – CULTURE ...................................................................................................................................76

C - PRIORITY 2 –MODIFYING THE PROFILE OF PRODUCTION TOWARDS ACTIVITIES OF THE FUTURE .....................................................................................................................................92

C.1 – OPERATIONAL PROGRAMME FOR AGRICULTURE AND RURAL DEVELOPMENT.....................................................................................................................................92 C.2 – OPERATIONAL PROGRAMME FOR FISHERIES......................................................................94 C.3 – OPERATIONAL PROGRAMME FOR THE ECONOMY .............................................................95

D – PRIORITY 3 – ASSERTING THE VALUE OF THE LAND AND PORTUGAL'S GEO-ECONOMIC POSITION.................................................................................................................................................105

1. GENERAL ASPECTS .....................................................................................................................105 2. COHESION/CONSISTENCY FUND, COMPLEMENTARITY AND FRAME OF REFERENCE ...107 3. TRANSPORT ..................................................................................................................................109 4. ENVIRONMENT .............................................................................................................................123

E – PRIORITY 4 – PROMOTING SUSTAINABLE REGIONAL DEVELOPMENT AND NATIONAL COHESION...............................................................................................................................................130

1. GENERAL FRAMEWORK .............................................................................................................130 2. REGIONAL PROGRAMMES .........................................................................................................132

CHAPTER III – TECHNICAL ASSISTANCE ........................................................................................168

TECHNICAL ASSISTANCE ...................................................................................................................168 OPERATIONAL PROGRAMME FOR TECHNICAL ASSISTANCE TO THE CSF .............................169 TECHNICAL ASSISTANCE UNDER THE OPERATIONAL MEASURES...........................................171

CHAPTER IV – INTEGRATION OF EX-ANTE EVALUATION.........................................................172

1. RELEVANCE OF THE STRATEGY ADOPTED..........................................................................173 2. ANALYSIS OF EXTERNAL AND INTERNAL CONSISTENCY ...............................................173 3. MACROECONOMIC IMPACT ....................................................................................................177 4. IMPACT ON EMPLOYMENT AND SOCIAL COHESION ........................................................181 5. ENVIRONMENTAL IMPACT...................................................................................................... 156 6. IMPACT ON EQUAL OPPORTUNITIES FOR MEN AND WOMEN........................................ 158

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CHAPTER V – FINANCING AND ADDITIONALITY......................................................................... 161

1 – FINANCING ..................................................................................................................................... 161 2 - VERIFICATION OF ADDITIONALITY ..........................................................................................197

CHAPTER VI – PARTNERSHIP .............................................................................................................203

CHAPTER VII – IMPLEMENTING PROVISIONS ..............................................................................204

1 - MANAGEMENT AND MONITORING............................................................................................204 2 - EVALUATION OF THE COMMUNITY SUPPORT FRAMEWORK AND OF THE OPERATIONAL PROGRAMMES ................................................................................................................................... 214E 3 – FINANCIAL CONTROL AND IRREGULARITIES ........................................................................215 4 – COMPATIBILITY WITH OTHER COMMUNITY POLICIES........................................................218 5 – SMALL SUBSIDIES FOR LOCAL ORGANISATIONS ..................................................................222 6 – EFFICIENCY RESERVE ..................................................................................................................222 7 – PROGRAMMING RESERVE ...........................................................................................................223 8 - INFORMATION AND PUBLICITY ..................................................................................................224 9 – ELECTRONIC INFORMATION SYSTEM ......................................................................................224

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CHAPTER I – INITIAL SITUATION 1. INTRODUCTION 1.1. The Community Support Framework for Portugal for the period 2000 to 2006 (the third CSF) specifically allows the proposals of the Commission received by the European Council of Berlin and developed in the various legislative instruments adopted following the approval of Agenda 2000 to be applied. Such proposals were marked, in the first place, by the experience gained by the Community and national institutions since 1989, when the first major reform of the Fund and other Structural Funds instruments took place, which gave rise to a philosophy of intervention based on the principles of subsidiarity and programming. They were also determined by the two main structural problems of the European Union – the existence of major differences in the living conditions of the various European countries and regions and the extent of unemployment in the majority of the Member States. And, finally, they endeavoured to meet the important challenges of the immediate future, among which enlargement, on account of its profound consequences in the institutional pattern of the European Union, and globalisation, which leads to new ways of organisation and operation on the part of the world-wide economy, have to be prominent. 1.2. In compliance with Article 15 of Council Regulation (EC) 1260/1999 of 21 June 1999, the Community Support Framework is based, in the first place, on the proposals submitted by national authorities under the different Regional Development Plans (RDPs). The Portuguese RDP was submitted to the Commission on 13 October 1999. It covers aspects relating to integration, strategic orientation, operational organisation, financial programming and the organisational structure of structural support for the programming period beginning in 2000 and ending in 2006. The Portuguese proposals had been the subject of more in-depth negotiations with the European Commission, and, observing the statutory deadlines prescribed, this third CSF is now approved 1.3. In recent years, and benefiting from substantial support from the European Union via the financial contributions from the Funds and other structural instruments and provided for by CSFs I and II, Portugal achieved major economic progress in terms of nominal and real convergence and financial discipline so that ambitious objectives in the period 2000-2006 can be aimed at. However, Portuguese economic growth must be based on new factors of competitiveness, adopting a development model with better conditions of sustainability. This attention to the new factors of competitiveness takes into account the recent development of the national economy which was reflected in profound changes in the country’s structure of production (although without bringing about decisive changes in the respective pattern of specialisation). Among these changes, the rapid modernisation of the service sector, the establishment of a dynamic focus in the processing industry around transport equipment and machinery and electric and electronic equipment, the development of the “chain of value” of some traditional industries which are heavily export-orientated, the intense effort in the implementation of public works and construction for housing, and the decline of the contribution of the primary sector to total GVA, stand out in particular. Collectively, these changes allowed the economy to maintain more favorable levels of activity and employment than EU countries in general. However, the model of economic growth which characterised the last decade of the 20th century was essentially extensive and of a dual nature, allowing the growth of sectors generating employment on a wide scale, without special needs as regards qualifications among workers and, accordingly, with low levels of growth

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in productivity, and at the same time the consolidation of a restricted nucleus (albeit in terms of geographical concentration) of activities of industry, services and knowledge, with more demanding dynamics as regards productivity and the establishment of skilled employment. Major risks are associated with such a model and they are reflected in particular in a relative lack of global preparation of the economy for a period of more intense international competition. 1.4. Sustainable development is supported by both economic prosperity and social and environmental equity. The relationship between these components cannot be viewed as a source of conflicts but rather as a commitment which reflects and implies new solutions for the achievement of economic and social cohesion. In the Portuguese case, this perspective allows a balance of positive effects between measures intended to boost the competitiveness of the economy to be defined, with special emphasis on those which set as objectives the improvement of the qualifications of the population or the increase in the efficiency of undertakings, and measures to promote the quality of life, in particular as regards the environmental protection and nature conservancy and in the social sphere (as in the sectors of education, culture and health). From this same perspective, it is still the assumption of horizontal or transversal dimensions which inform the definition and application of the various programming instruments contained in the third CSF and influence the country’s development: this is the case with environmental protection, equal opportunities for men and women and the information society. 1.5. Bearing this integration in mind, the third CSF covers the following three priority spheres of intervention:

• Human potential Priority for the evaluation of human potential results from the finding that low levels of productivity constitute a weakness of the Portuguese economy. Indeed, progress in convergence which had been remarkable in various spheres still proved very inadequate as regards people’s level of skills and the results obtained in productivity terms.

• Productive activity The aim is to achieve growth in competitiveness through support for business strategies and consideration of other decisive factors, such as scientific progress and technological innovation and the boosting of the services provided for undertakings. At the same time, provision is made for measures to support agriculture, rural development and fisheries.

• Structuring of the territory Considering the territory as an element of cohesion of everything national and of the integration of Portugal in the global and European economy leads in turn to major guidelines as regards the construction of infrastructures compatible with the preservation of the environment and support for the development of Portuguese regions, with a view to rectifying the main imbalances and regional disparities.

1.6. On 1 July 1999, the Commission adopted its “Guidelines for Programmes in the period 2000-2006”, which the Member States had to consider when drawing up their RDPs. These guidelines defined basic strategic priorities:

• the promotion of economic and social cohesion by according priority to sustainable growth and regional competitiveness so as to ensure the creation of employment;

• coherence between economic growth, social cohesion and the protection of the environment, with a view to stimulating sustainable development by not only integrating the environment in the policies pursued but also guaranteeing equal opportunities for men and women;

• equilibrium in land-use development, as a requisite for interlinking the policies implemented and as a requirement for the establishment of efficient and operative partnerships.

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In general, the Guidelines referred to are applied to national territory as a whole and tallied with the economic and social development strategy proposed by the Portuguese authorities and negotiated with the Commission. Consideration of these Guidelines led, in general, economic and social cohesion being assumed as a structural objective of the development process supported by the intervention of Community funds. Thus, as regards human resources, training and employment, the third CSF pursues differentiated and complementary policies aiming to guarantee growth in employment and the effective utilisation of human resources. Equal opportunities for men and women constitute a principle which, it is considered, has to be continued across programmes by operational measures in general. In the sphere of production activities, particular value is assigned to the aspects related to the system of innovation and the modernisation and development of SMUs. The development of the information society appears as a requirement common to the different operational programmes, with the third CSF contributing to meeting the needs needs of the private sector and public institutions in this sphere. With this in view, special efforts are being made to facilitate the use of new technologies and information networks and communication by individuals and undertakings. The financing of infrastructures, and especially transport infrastructures, obeys principles of efficiency and integration and is based, to a great extent, on methods of financing which associate the public and private sectors. Linking to trans-European networks remains a basic objective. Policies are provided for which aim to increase Portuguese competitiveness in national and Community plans and which are reflected in the increase in regional competitive capacities, contributing towards improved equilibrium between the development of coastal and inland regions; the different measures for the development of towns provided for in the regional programmes of the third CSF constitute a powerful factor in promoting this balance. Finally, although of fundamental importance as an essential dimension of Community intervention, environmental sustainability is assumed to be a necessary component of the development process and it not only gives rise to major investments as regards the improvement of living conditions and environmental protection but constitutes a dimension whose presence is sought in all the operational measures of the third CSF

2. GENERAL DESCRIPTION AND ECONOMIC SITUATION 2.1. TERRITORY AND POPULATION Portugal has a territory of 92 072 km2 made up of continental Portugal (97% of the total area) and the archipelagoes of Madeira and the Azores. The per capita GDP (purchasing power parity - ppp) was 73.6% of the Community average in 1998. The population is of the order of 9.9 million inhabitants, 95% of whom live in continental Portugal. Population density is 108 inhabitants/km2 This average, which is lower than that in the European Union, masks wide regional differences. Thus the regions of Alentejo and Algarve have a much lower density than the country as a whole: 19.2 and 69.5 inhabitants/km2 respectively. The birth rate stood at 11.4‰ in 1997, (EUR 15: 10.8‰) The age structure of the population is similar to that of the European Union, with the young population (< 14 years) representing 17.6% and the elderly population (> 65 years) 14.7% of the total population. In the latter case, Portugal still enjoys some advantage compared with the majority of the rest of the Member States (EUR 15: 15.6%), but there are significant variations among the different regions of the country: thus the population of the Autonomous Regions of Azores and Madeira and North region is comparatively younger than that of the rest of the regions whereas in the regions of Centre, Alentejo and Algarve the elderly population exceeds the national and Community averages.

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2.2. ECONOMIC SITUATION 2.2.1. As a general rule, the situation of the Portuguese economy in the period covered by the two previous Community Support Frameworks (1989-1999) was characterised by a positive macroeconomic development which made major gains possible in terms of nominal and real convergence, by a broad process of structural adjustment, brought about essentially by the deepening of European integration and (the main negative aspect of a globally favourable picture) by an inadequate rate of convergence of productivity, which may be seen through the persistence of a pattern of specialisation in which products and processes of low technological intensity, deficient organisational capacities and not very high levels of skill among human resources predominate.

Table I-1 Main macroeconomic indicators

(%) 1985 1990 1995 1999* Per capita GDP (compared with the EU average) (a)(c)

52.8 60.7 70.6 73.3

Productivity (compared with the EU average) (a)(b)

49.3 55.7 63.8 65.8

Rate of unemployment 8.7 4.6 7.3 4.6 Rate of inflation (ICP) 19.4 12.4 4.5 2.3 General government balance (as % of the GDP) (c)

-10.5 -5.1 -5.7 -1.9

Gross general government debt (as % of the GDP) (c)

60.8 64.2 64.7 56.1

Current account balance (as % of the GDP)

0.4 -1.7 -5.1 -2.5

Degree of openness of the economy (d) 35.8 37.6 34.3 35.4 Rate of investment (as % of the GDP) 23.9 27.6 23.6 25.7 Source: European Commission * Estimated figures (a) In purchasing power standards (PPS) (b) GDP per person in employment; the EUR 15 averages for 1985 and 1990 do not include the GDR (c) Calculated in accordance with the definitions applcable under the excessive deficit procedure (d) (Exports + Imports) / 2 / GDP * 100 (at current prices)

2.2.2. The progress achieved in terms of nominal convergence allowed Portugal to be part, from the outset, of the group of Member States participating in economic and monetary union. In terms of the per capita GDP (gpc), and for the period between 1993 and 1999, the difference in relation to the average of the 15 countries of the European Union decreased by more than 5 percentage points. Indeed, the rates of growth of the Portuguese economy have been greater than those of most of the rest of the Member States and it may be anticipated that this situation will continue until 2003, if the current positive trends of the national economy persist: heavy private consumption, resulting from a favourable situation on the labour market, high levels of public and private investment, stimulated by low rates of interest in the Euro zone and by greater stringency in the management of public finances and the acceleration of exports as a result of a favourable international economic situation.

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In their turn, changes in the inflation rate were part of the monetary policy strategy which was being pursued, having the maintenance of the stability of prices in the Euro zone as its objective. The growth differential between the rate of Portuguese inflation and the average rate of inflation of EUR 15 was gradually reduced and, in 1997, the rate of inflation in Portugal, measured by the harmonised price index, stood 0.2% above that average (compared with a difference of 7.1 percentage points in 1990). Indeed, the rate of inflation went down from 13.4% in 1990 to 2.2% in 1998. The stabilisation of the rate of exchange of the Escudo played a crucial role in the deflation process, which benefited further from the deceleration of nominal wages.

Table I-2 Economic development – 1994-99

EUR 15 Portugal Annual average rate (%) GDP pm 2.3 3.1 Private consumption 2.1 3.1 GFAF 3.1 5.9 Productivity (i) 1.5 2.1 Employment 0.7 0.8 Remuneration (nominal) 3.0 5.2 Remuneration (actual) (ii) 0.6 1.3 (i) GDP per person in employment (ii) Deflated with the index implicit in the GDP Source: European Commission

2.2.3. There was a clear improvement in the situation of public finances between 1993 and 1999, allowing general reductions in the public accounts deficit to be made and even primary surpluses to be maintained. This progress resulted from significant profits obtained in terms of budgetary consolidation, which further allowed the necessary public investment for the correction of structural imbalances and the process of real convergence to be guaranteed: indeed, the reduction of the deficit from 6.1% of GDP in 1993 to 2.3% in 1998 was reached without jeopardising the level of that investment, which stood at 4.0% of GDP. Also, the favourable conduct of public accounts, together with the policy of reducing public debt and the decrease in interest rates, contributed in 1996 towards curbing the rise of public debt in the GDP. Portugal thus fulfilled, in 1997 and 1998, the two criteria of convergence relating to Public Finances defined in the Maastricht Treaty. The Stability Programme for 2000, submitted by the Portuguese Government at the beginning of this year, provides for continued efforts in budgetary discipline so that equilibrium in the budget can be achieved in 2004 without detriment to the value of public investment.

3. LABOUR MARKET 3.1. GENERAL ASPECTS The labour market has shown a good capacity for adaptation to the economic cycle (albeit with some temporary phase displacement), with the flexibility of wages having operated as a factor attenuating any negative repercussions in employment terms. The development of unemployment in the face of the economic cycle contrasts clearly with that in the rest of European countries, which is characterised by greater elasticity in relation to the rate of activity. On the other hand, this behaviour of the labour market has inhibited expressive gains in terms of productivity.

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Under these conditions, the pattern of growth of the Portuguese economy in the two last cycles was favourable to the creation of unemployment, although the globally favourable performance must not mask the existence of situations of vulnerability which condition either the capacity of the future creation of unemployment or the rate of modernisation of the fabric of production. 3.2. EMPLOYMENT In the period of rapid growth after accession to the Community (1986-90), the average increase in employment reached 2%. Between 1991 and 1994, the creation of unemployment suffered a major setback, with an average decrease of 0.5% per year. The tendency, beginning in 1993, for the rate of unemployment to worsen, would only ease in 1997, since the recovery of economic activity, although consolidated since 1995, would only in that year bring about dynamics for the creation of unemployment which were sufficient to surpass the growth in the active population. Hence total employment will have grown in 1998 at an average yearly rate of 2.3%. At the same time, an increase in the rate of employment has been seen. In 1998, the figures were higher than those recorded in the EU (68.9% in Portugal, 61.1% in the EU). This difference could be regarded as not very significant, on account of it corresponding approximately to the existing differential in levels of employment in the Portuguese and Community primary sectors. However, in Portugal, the substantial reduction in the importance of agricultural employment co-existed with the stability, or even growth, of the rate of employment. The higher value of this rate compared with the average of the Member States seems to result mainly from the high rate of female employment recorded in Portugal. It must be pointed out that in Portugal, contrary to what is seen in other European countries, recourse to part-time work is still very unusual. The distribution of the population employed by the activity sectors evolved, in the period between 1985 and 1997, towards a reduction in the importance of the primary sector, which was compensated for by a corresponding increase in the population employed in the tertiary sector. The reduction of the active population in agriculture mainly affected the young, more qualified, strata of the population. Employment in the sector is essentially provided by mainly female individual or family producers belonging to higher age strata and with low levels of education. In its turn, the secondary sector accounted for more than 30% of the employed population in 1998. An analysis with a more detailed breakdown of the development of the employed population in this sector shows a reduction in the extracting and processing industries and a growth in electricity, gas and water, and in construction and public works. Employment in the tertiary sector exceeds 50% of the total and shows a growing trend in the long term, albeit at a relatively slow rate. Between 1992 and 1997, greater growth in employment was to be seen in the restaurant and hotel business, computer activities and in research and development, health and other service activities. The planned 1% increase in employment up to 2003 will allow the rate of unemployment to be reduced significantly in that year. The risk which this development entails is to cause the rigidity of the labour market to intensify and lead to inflationary tensions which make the sustainability of growth in output and employment difficult. However, wages in the private sector do not, for the time being, show any signs of acceleration, lying as they do at generally moderate levels. On the other hand, the decentralised nature of wage negotiations in Portugal makes it unlikely that the increases decided on in respect of specialised professions which require high qualifications will be automatically reflected in overall wage inflation.

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3.3. UNEMPLOYMENT The level of the unemployment is one of the lowest in the European Union, with the rate reaching a maximum of 8.6% in 1985 and subsequently falling to 4.1% in 1991; it later rose again to 7.3% in 1996. In 1998 it decreased once more, to 5%. Moreover, the persistence of unemployment is not so marked as in the other countries, so that the rate of unemployment does not seem to increase from one cycle to the next. The breakdown of the rates of unemployment by level of education shows that the highest figures are at intermediate levels, particularly in the case of 3rd cycle diploma holders and secondary education diploma holders, this applying in the case of all age strata. This situation can be accounted for by the high absorption of less qualified labour in the current level of development, although this will not be able to be maintained in the long term in the face of the inevitable acceleration of sectoral restructurings. On the other hand, although the rates of unemployment among the Portuguese people with advanced training are lower than the overall rates of unemployment, a trend towards the approximation of the respective figures is noted. It may further be noted that the rate of unemployment of women with a degree is higher than that of men (save in 1995). On the other hand, unemployment in Portugal is structurally serious and overcoming it poses complex problems. The main difficulties stem from the characteristics of this development in the country. Thus, on the one hand, the importance of long-term unemployment, and this particularly affects workers with a lack of skills and qualifications, as well as old workers, is high. On the other, the proportion of young unemployed, occasionally with a relatively high level of school qualifications - albeit ill-adapted to existing demand - is also very significant. 3.4. STRUCTURAL FRAGILITY OF THE LABOUR MARKET Notwithstanding the positive behaviour of the labour market in recent years, and especially in 1998, major structural weaknesses persist, among which the following are prominent: • Low level of education and training on the part of the Portuguese population in general,

and the most elderly adults in particular, especially by comparison with other European countries. Although young people have a qualifications structure which is less unfavourable than that of the adult population and the respective rate of participation in the educational system lies close to the Community average, particularly in the case of women, the proportion of those with a level not higher than the 9th year of compulsory schooling, as well as the number of young people leaving the formal educational system without a 9th year certificate, is still high.

• Existence of groups with special problems of (re)integration in work. This applies in the case of young people whose rate of unemployment is double that of the total rate, reflecting major difficulties in the transition from school to working life, the oldest workers, as a result of processes of sectoral restructuring in many cases, women who face, in addition to unfavourable rates of employment and unemployment and an excessive concentration of activities attracting low wages, significant wage differences and are represented most in long-term unemployment, and ethnic minorities and the disabled.

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• Persistence of substantial long-term unemployment and very long-term total unemployment

• Vulnerable sectoral structure, especially in the medium and long term, in terms of sustained growth/competitiveness/employment, a fact to be noted mostly in traditional activities, and of intensive labour with low levels of productivity and wages.

• Business structure predominantly based on small and very small undertakings. In fact, 81.6% of Portuguese undertakings have less than 10 workers, representing some 25% of total employment. These undertakings show a weak potential for adaptation and subsistence, predominantly recruiting personnel who are not very well qualified and offering limited opportunities for training.

• Persistence of major territorial disparities, which are reflected, in particular, in the relative concentration of the manifestations of unemployment within metropolitan areas and in some country districts. On the other hand, the fragility of employment systems is also very great in the Azores and Madeira, which are regions marked by isolation and the fragility of their dominant economic sectors.

4. STRUCTURAL ANALYSIS 4.1 GENERAL ASPECTS 4.1.1. Portugal’s accession to the European Union, associated with the policy of economic and social cohesion pursued at Community level as an indispensable counterpoint to the strategy for the realisation of the internal market, contributed decisively to the country’s rapid economic and social development. In its turn, this change, which took place at an unprecedented rate in Portuguese history, was facilitated by the major Structural Funds reforms launched before accession and continued in the subsequent period. Such reforms, made possible by the openness of the Portuguese economy to outside, by the establishment of an environment of financial stability and by the strengthening of the fabric of Portuguese business, established conditions favouring the setting of ambitious objectives for economic performance in future years. It must not, however, be forgotten that Portugal is still the second least developed country in the EU and that, moreover, the seven regions of the country are at very different stages in the development process: thus, while the per capita GDP of Lisbon and Vale do Tejo stands at 90% of the Community average, that of the Azores, Alentejo and Madeira, for example, is still very far from this situation, with figures not exceeding 50% and 60% of that average. These numbers are, in turn, confirmed by analysis of the actual living conditions of the people. Endowment with infrastructures, including social and cultural infrastructures, follows the pattern of development of the country and it is in the backward regions that the greatest difficulties accumulate as regards qualifications among the population and the productivity of undertakings. 4.1.2. On the other hand, Portugal is a peripheral country of the European Union. Hence it is understandable that priority should be given to a development strategy based, on the one hand, on the opportunities afforded by the information society, by promoting the introduction of technologies which reduce the distance to the main markets and centres of knowledge and skills, especially through dynamics of networked operation of different types of institutions and, further, in the improvement of qualifications among human resources.

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4.2 HUMAN RESOURCES 4.2.1. Global analysis The situation in the country as regards human resources, can be summarised as follows: • Major shortcomings exist in the structure of qualifications and skills among the active

population and, in particular, the employed population;

• Major difficulties persist in the integration of young people in working life, which are the result of qualitative maladjustments between the supply of, and demand for, skills on the labour market;

• Despite the high rates of employment and the low level of unemployment, the latter shows particular characteristics which denote significant social fragility (especially by virtue of the major importance of long-term unemployment) and these are coupled with the existence of serious poverty and social exclusion problems;

• Marked inadequacies are noted as regards advanced training, especially in the sphere of research and development, with resulting difficulties of integration in undertakings with an innovation function and causing major delays at information society level;

• Significant situations of inequality persist between men and women, both in terms of income and professional advancement;

• Considerable territorial disparities are to be seen which are expressed, in particular, in different dynamisms on the regional labour markets.

4.2.2. Education In Portugal, and despite the positive development recorded between 1993 and 1996, the level of education of the population is still far from the Community average. Indeed, 80% of the population have primary level education (9 years of schooling) as their highest qualification, a figure which is greatly exceeded both by the average in the European Union (46%) and the figures seen in other Member States. On the other hand, only 10% of the population have a secondary education diploma (12 years of schooling), compared with a Community average of 41%. Also, as regards higher education diploma holders, comparison between Portugal and the European Union is likewise not favourable to the country, although here the disproportion is smaller: 10% in Portugal and 18% in the EU. Portugal continues to have a high rate of illiteracy (10.4% in 1996). At regional level, Alentejo has the highest level of illiteracy (20.9%), although in the regions of Centre and Algarve the values are also high (14.5% and 14.8%, respectively). The region of Lisboa e Vale do Tejo has the lowest rate nationally (6.7%). The school leaving age is 14. Pre-school attendance rates in the 1994/95 school year were lower in Portugal than in the European Union. In recent years, however, significant improvements have been seen in this area, which enabled figures of 48%, 59% and 64% by age 3, 4 and 5 respectively to be seen in 1996/97. 4.2.3. Professional skills and competence In Portugal there is, on the one hand, a low general level of skills as a result of cumulative shortcomings in the schooling of the population and, on the other, a sectoral structure where sectors of high labour intensity and low wages predominate. Thus in 1997, workers with a level of education below or equal to the 9th year of schooling represented 77.5% of workers working on behalf of others (85% in 1992). These characteristics constitute factors determining the low existing

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levels of productivity and also providing evidence of a weak capacity of adaptation on the part of the labour force. Accordingly, the structure of skills of the working Portuguese population is not very favourable, with a significant proportion of semi-skilled or unskilled staff, especially in the case of female labour. The development recorded in this sphere between 1990 and 1997 reveals, however, a substantial change in quality, with a substantial rise in the numbers of senior and middle-ranking executives and a reduction in the relative importance of semi-skilled workers, probationers and apprentices. This trend was particularly evident in relation to the increase in senior executives in the primary sector and senior and middle-ranking executives in the tertiary sector. Cross-analysis of the qualifications and levels of skill among workers working full-time on behalf of others reveals a low level of literary skills at all levels of qualification, leading to difficulties in professional rehabilitation on the part of the labour force in general. 4.2.4. Poverty and social exclusion In the European Union, Portugal has the greatest degree of inequality in the distribution of income and this, moreover, increased in the first half of the 1990s. This factor accounts, in great measure, for the existing situations of poverty in the country, given the form of distribution of primary incomes and the low levels of pensions. Moreover, the greatest incidence of poverty is to be seen among couples without children, followed by people over 65 years of age. Bearing in mind the similar values of the rate of poverty in the case of families (26%) and individuals (24%), it may be concluded that family size does not constitute the most important explanatory factor for poverty situations. Compared with the other countries of the EU, Portugal had, in 1994. the highest rate of poverty, defined as the percentage of families or individuals with an equivalent average monthly income below the poverty line which, in turn, was ESC 44 381.00, the lowest value in the EU in terms of GDP per capita. On the other hand, some social groups (long-term unemployed, members of ethnic minorities, drug addicts) are particularly subject to poverty and social exclusion. 4.2.5. Health Rates of general and infant mortality have been falling in Portugal, but they still remain at higher levels than those recorded, on average, in other European countries. However, in 1997, the rate of infant mortality reached 6.4 per thousand live births. The comparison of this number with that of 1991 (10.7‰ ) confirms the trend in progress which also marked the 1980s. Yet in 1977 the rate of general mortality went down to 10.5‰ of the population, although it may pointed out that this figure masks notable regional differences. Thus in Alentejo, for example, by reason of the ageing of the population, this rate is up to the high value of 14.6‰ (almost five percentage points above the European average). On the other hand, life expectancy in Portugal is also below the European average, both in the case of men (-2.7 years) and women (-1.8 years). The lowest figures of these rates are to be found in the two autonomous regions. The figures for the supply of health services are below those recorded in the majority of other Member States. Thus in 1996, Portugal had 3 doctors, 2.06 medical specialists, 3.2 nurses (1998) and 3.09 hospital beds per thousand inhabitants. On the other hand, the values of these indices, when established at regional level, reveal a situation of major disparities in health care in the different areas of the country. The proportion of expenditure on health in the GDP is 8.2% (EUR 15: 8.6%), having grown significantly between 1990 and 1997. Expenditure on health per capita shows, however, values lower than those in the rest of Europe, although per capita expenditure on medicines is much higher,

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pointing to some inefficiency in the systems for the control of expenditure within the National Health System. 4.3 PRODUCTIVE ACTIVITY 4.3.1. Structure of production 4.3.1.1. Industry, services and tourism The proportion of employment in industry stands at more than 30% of total employment and GVA at 33.9% of total GVA. These values are higher than those recorded at the beginning of the period covered by CSF II, mainly by virtue of the dynamics of industrial exports and the greater importance of new industrial products, particularly those linked to motor car manufacture. Comparison between the structure of Portuguese and European production reveals the unbalanced and excessively specialised nature of Portuguese industry, notwithstanding the fact that some progress has been recorded recently, yet this does not make a fundamental change in this situation possible. Thus in Portugal, the contribution to the balance of trade still derives, essentially, from the textile and forestry sectors. In recent years, specialisation in the electricity sector has intensified but the disadvantage in the automobile and electronics sectors has diminished. At the same time, the disadvantage in the agrifood sector has become marked, by virtue, in particular, of the strong growth in internal demand accompanied by a moderate growth in production. Services are under-represented in the Portuguese economy. Employment in the tertiary sector is 55.7% of total employment and the gross GVA of service activities stands at 61.9% of the total, this being substantially below the corresponding European figures (65.3% and 66.4% respectively). As a result of this relative backwarness, there is major potential for development in this sphere, particularly in employment terms. On the other hand, Portugal is one of the Member States where tourism is traditionally very important. In an international context of growing development in this activity, Portugal has retained its market shares, absorbing about 2.8% of European tourist arrivals and 1.6% of worldwide movements in 1997. However, between 1990 and 1997, receipts from tourism at constant prices remained stationary; the respective rate of change between 1993 and 1997 was even negative (- 0.2% per year). Also the average receipt per tourist/day at constant prices gradually decreased in the 1990s. It should be pointed out, however, that the average receipt increased in 1997 compared with the previous year. 4.3.1.2. Agriculture The primary sector (agriculture and fisheries) accounts for 13.5% of employment and the agricultural sector properly speaking contributes 4.1% of total GVA, values which are significant in a European context and developed economies in general. Agriculture constitutes the essential economic base of some areas in the country of a markedly rural nature. Notwithstanding the positive effects of action under CSF I and II, this sector still has fragile aspects due, in particular, to the low competitiveness of agricultural undertakings resulting primarily, in turn, from their structure and small size. 4.3.1.3. Fisheries The contribution of Portuguese fisheries to the GDP (2% of the total GVA) is relatively appreciable when compared with that in other countries of the European Union in general. The number of fishermen as a proportion of the population is also very high but, in less-favoured coastal areas, hardly any alternative employment exists. 4.3.1.4. Energy Portugal has a combination of features which are common to the countries where there are lower levels of development: a high level of energy consumption per unit of GDP (ratio of intensity of energy), which is 30% above the Community average, a low global consumption of energy and a high level of dependence on imported energy (87%). The natural gas project, already financed by the European Union under CSF I and II and the Community Initiatives REGEN and

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INTERREG II and whose completion will be financed by the present third CSF, will allow significant improvements to be made in the Portuguese energy sector and environmental protection. 4.3.2. Small and medium-sized undertakings (SMUs) Business in Portugal is characterised by the predominance of micro-undertakings (undertakings with less than ten workers), which represent almost 80% of the total number of Portuguese undertakings. Side by side with them, small undertakings (undertakings with 10-40 workers) represent about 15% of this total. Between 1991 and 1997, the total number of micro-undertakings increased by about 60%, having risen from approximately 100 000 in 1991 to over 160 000 in 1997. During this same period, the number of small undertakings remained constant and small and medium-sized undertakings decreased. In the mid-1990s, the average size of a Portuguese industrial company was, in terms of employment, 27 workers and about 99% of the undertakings in this sector can be characterised as micro-undertakings, or SMUs. They account for 80% of total industrial employment, 70% of industrial production, 70% of total investment in industry and 60% of national exports. In recent years, industrial employment in Portugal has increased by only 0.25% while employment in industrial SMUs has grown by more than 9%. However, in terms of average productivity, the figures for large undertakings are still almost three times higher than those of SMUs. 4.4. COMPETITIVENESS OF THE ECONOMY 4.4.1. Productivity The exceptionally low level of productivity constitutes a major economic problem, with immediate consequences in terms of lack of competitiveness on the part of the Portuguese economy. In Portugal, productivity did not exceed 65.8% of the average of EUR 15 (1999) in terms of GDP per employee. This situation is the result of the inadequate competence and skills of the bulk of the active population, production processes which do not favour innovation and the persistence of major shortcomings in business management and organisation. 4.4.2. Innovation, Science and Technology The differences in development between Portugal and the European Union may be very clearly seen in innovation, science and technology. Two of the most widely-used indicators in this sphere (Expenditure on R & D as a percentage of GDP; Total staff in R & D per thousand of the active population) show very low values in the European context, notwithstanding the significant progress achieved during the period covered by CSF I and II, particularly in the case of specialised human resources, which not only grew in quantitative terms but enhanced the quality and diversity of the training opportunities available to them. On the other hand, the vast majority of Portuguese regions are in still more unfavourable positions, since it is in the Lisboa e Vale do Tejo region that the bulk of expenditure on R & D is concentrated. On the other hand, business expenditure on R & D (BERD) accounts for only 20% of total expenditure on R & D, whereas it amounts to 2/3 of the same total expenditure on average in the European Union. This situation, allied with the great concentration of financial resources in the public and university sectors, directly affects the innovation system, which in the current circumstances does not manage to respond to the needs of undertakings or even allow such needs to be identified in clear and operational terms.

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4.5. TRANSPORT AND ACESSIBILITY 4.5.1. Portugal’s peripheral situation makes special demands on the transport and communications system; indeed, a large proportion of the measures supported by the Structural Funds in the preceding periods was aimed at improving the respective basic infrastructures. However, most of the available indicators still point to major inadequacies in this sphere. 4.5.2. Road infrastructures Notwithstanding the significant progress recorded in recent years, there is still a major shortage of quality roads (motorways and others). In 1990, these roads represented 29% of the European average, calculated via an index drawn up collectively by the Member States and weighted by area and population criteria; in 1996, this figure had gone up to 56%. The density of the motorway network was 8.7 km/1 000 km2 in 1997 compared with 6.4 km/1 000 km2 in 1994. The Portuguese situation is more favourable and regional variations less significant when the total road network is considered. National and international goods traffic is predominantly conveyed by road, this being the mode transport used proportionally more in Portugal than in other countries of the Union: 90.3% of tonnes/km are carried by road, as against 73.5% in EUR 15. This situation gives rise to some problems, particularly in environmental terms. 4.5.3. Railway infrastructures In 1997, there were 33.1 km/1 000 km2 of railways in Portugal by comparison with 48.4 km/1 000 km2 in the European Union. The composite indicator referred to above reveals that the length of the Portuguese railway network is 65% of the European average. A major development has taken place in the electrification of the lines in operation, with the percentage of the electrified network in relation to the total network having risen from 13.6% in 1990 to 24.1% in 1997. The conveyance of passengers and goods by rail is relatively less important than in the other countries of the European Union and this mode of transport has even declined in importance in the case of passenger transport, by contrast with the international trend. This situation is directly related to needs for qualitative improvements in infrastructures and traffic equipment, which allows in particular an increase in the speed of the network for basic journeys and the establishment of conditions of competition in relation to road and air transport. 4.5.4. Air transport The total number of passengers conveyed through Portugal’s national airports has gone up continuously in recent years and rose from 13.2 million in 1994 to 15.2 million in 1997. 4.6 ENVIRONMENT 4.6.1. The general picture characterising the state of the environment at the beginning of the 1990s revealed, on the one hand, enormous deficiencies in infrastructures for the supply of water and treatment of domestic effluents, and an almost total absence of any waste treatment. Secondly, the behaviour of economic agents demonstrated that considerations of environmental protection and the preservation of natural resources were far from representing an essential concern on their part. Finally, the government did not have the necessary instruments for the development of a coherent policy. Although the objectives laid down in CSF II were not achieved, marked improvements in quality were seen in the period 1994-1999.

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4.6.2. Emissions of CO2 and other gases responsible for the greenhouse effect Emissions of CO2 per capita (4.5 t/inhab. in 1994) have stood at values which are about half of the European average (8.4 t/inhab.). Also, emissions of sulphur oxides (SOx) and nitrogen oxides (NOx) are at levels below the European average. As a member of the European Union, Portugal is also bound, in accordance with the Kyoto Protocol of December 1997, to control the emissions of these gases. The national authorities are drawing up a national programme whose objective is to meet the country’s obligations under this Protocol. From this programme, sectoral plans of action will result which will be integrated in the national strategy. 4.6.3. Basic sanitation Access to the domestic water supply has been improving favourably in recent years. In 1997, 86% of the population had a domestic water supply, this percentage currently being 90%. Significant regional disparities are to be seen, however. Another important indicator of attendance to basic sanitation is that of the percentage of the population served by systems for waste water drainage and treatment. In 1990, only 55% of the Portuguese population was served by drainage systems and only 21% had access to treatment systems. Currently, these percentages are 75% and 55% respectively, although these values are still well below European averages (82.9%). The proportion of the population covered by services for the collection of solid urban waste is high, the level of service being 96.4% in 1996. As regards the distribution of this type of service in terms of area, no significant variations are to be seen among the regions. As for the treatment of solid urban waste, and considering only sanitary incineration, composting and burial as adequate treatment, the percentage of the population covered by such services did not exceed 24% on continental Portugal in 1997. 4.6.4. Industrial waste In an attempt to obtain reliable and internationally comparable statistical data, Order in Council 189/95 of 20 June 1995 approving the model of industrial waste maps was published, having as its basis the European Waste Catalogue classification. In accordance with the inventory of dangerous waste drawn up in the first quarter of 1997, 123 900 tonnes of waste classified in this category existed, of which about 62% was ultimately disposed of by sanitary burial, incineration or physical/chemical treatment. In district terms, it can be affirmed that the highest figures of dangerous waste production are to be seen in Setúbal, Castelo Branco and Aveiro. 4.6.5. Water resources In Portugal there is a high degree of pollution and environmental degradation of water resources caused by urban concentration (given the absence or deficient treatment of waste water), climatic irregularity and diffuse pollution associated with the more intensive forms of agricultural production. Under the current system, five classes exist for gauging the surface water quality; it may be noted that, in relation to the 1996/1997 water consumption year, and considering 16 stations integrated in the “Water Quality Network” (WQN), pertaining to the main water basins, it may be seen that the quality shows level D (“highly polluted”) in six of these water basins (37.5%) located mostly in the south, a situation which stems in particular from farming and grazing activities and, on occasion, pig farming and processing by oil presses; in seven of these basins (43.75%), water quality corresponded to level C (“polluted”), in other words suitable for various uses but only usable for human consumption after adequate treatment; and in the three other cases, corresponding to 18,75% of the total, water quality was equivalent to level B (“slightly polluted”). Still in connection with surface water quality, attention should be drawn to the state of lagoons. In this connection, the main problem is that of eutrophication, a phenomenon stemming from from sources of diffuse pollution, given the pick-up of nutrients by means of water, which occurs in both running water (the rivers Minho, Douro and Guadiana) and in lagoons (Quiaios, Mira and Salgueira). Underground water is the most important source of water for domestic and industrial supply on continental Portugal. Taking into account the legal requirements in this sphere, it must be spointed

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out that, in the period between 1995 and 1997, the data relating to the 16 aquifer systems point to the existence of some cases in which indications of occasional degradation of the quality of the water are apparent. Localised situations of contamination through nitrates resulting from bad agricultural practices have, on the other hand, been detected. As regards the quality of bathing water in 1997, in 302 out of the 336 existing sampling sites there was conformity with the mandatory figures in Directive No 76/160/EEC. At 265 of these sites, conformity with the guide values set by that Directive was recorded. In relation to the quality of estuarine waters, and taking into account the available data relating to the years 1992-1997, it may be seen that the worst situations are recorded in the estuary of the Tagus and the River Aveiro. 4.6.6. Soils The soil constitutes a basic component of ecosystems and natural cycles and is furthermore a reservoir of water. In occupational terms, at NUTS I region level (which covers the country as a whole) and it was the case in 1996 that 39.1%, 35.4%, 8.7% and 16.7% respectively of the territory was assigned to agricultural, forestry, urban and other purposes. In Portugal, soils suffer a process of degradation through erosion arising from natural and intrinsic conditions and aggravated by climatic, geomorphological, phytological and anthropogenic factors. Another source of this degradation is the contamination due to the uncontrolled dumping of rubbish, the deposit of liquid and solid effluents from certain industrial and agricultural activities (intensive cropping and stockfarming, excess pesticides and fertilisers, and irrigation systems). 4.6.5. Fauna and flora In Portugal, natural flora, fauna and habitats have come to be subject to grave pressures due to the extensive human inroads into the territory and the economic development of the country. Urgent measures for the conservation of the rich and diversified natural heritage of the country, as well as the stepping up of measures for the integrated and rational management of natural resources, are thus needed. 4.5.6. Noise Noise is a very relevant factor in the degradation of the quality of urban life. Among the most significant sources of noise, that resulting from road, rail and air traffic is on the increase but other forms of sound pollution, related to economic activities, also exist. In Portugal anti-noise legislation has consisted, since 1997, of a General Regulation which has subsequently been updated, taking into account the development of Community regulations in these fields. 4.7 INFORMATION SOCIETY The expansion and gradual improvement of telecommunications infrastructures are a necessary, although not a sufficient, condition for the development of the information society. The dimension of international communications, estimated specifically by the volume of outward international traffic, reveals that in 1997 Portugal’s figures were below average European ones, with 40.11 minutes of outward international traffic recorded per capita by comparison with 65.66 record in the European Union.

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Table I-3

Size of the market and development of the network

UE Portugal 1995 1997 1995 1997

International telecommunications traffic (Outward MITT per capita) i) - 65.66 - 40.11

Lines of telecommunications access per 100 inhab. 49.2 51.6 37.1 40.8

Mobile phone subscribers per 100 inhab. 5.9 14.0 3.5 15.4

Fixed network (% digital access lines) 71.24 92.96 70.00 88.30

i) MITT = Minutes of international telecommunications traffic Source: OECD/Communications Outlook

The level of penetration of the public exchange telecommunications network, measured by the number of access lines per 100 inhabitants, indicates that Portugal is still at a level below that of the European Union, with 40.8 lines/100 inhabitants (as against 51.6/100 in the EU). The activity of mobile services has come to be characterised by very high rates of growth and, in 1997, the number of mobile phone subscribers per 100 inhabitants was already higher than the European average. In the digitalisation of the fixed network, a significant modernisation effort is being seen, resulting in lower maintenance costs, as well as the provision of new services and a rise in the quality of the service provided. In 1997, the rate of digitalisation of the fixed network was 88.3%, yet this is still below the European average (93%). Notwithstanding its rapid and constant development, the infrastructure of the Internet still falls short of European standards. Thus in July 1998, the number of hosts per 1 000 inhabitants in Portugal corresponded to about 30% of the EU average. Also, in July 1998, the number of web servers per 1 000 inhabitants was 0.5, representing less than half the European average (1.16). The number of e-commerce websites has been rising rapidly, and doubled in the period between September 1997 and August 1998; however, it is still 58% of the European Union average. The prices charged in Portugal in the telecommunications area are higher than the European average and constitute an obstacle to the generalisation of Internet access and the exploitation of the opportunities afforded by the new technologies, particularly as regards e-commerce. However, Internet access charges have come down recently, due mainly to the enormous competition between operators bent on increasing their respective market shares. 4.8. REGIONAL DISPARITIES From consideration of the composite human development index (which combines, in a summary indicator, four indicators linked to the conditions of health and comfort of the population, its level of education and per capita GDP), it may be concluded that, at NUTS II region level, only the region of Lisboa e Vale do Tejo lies above the national average and that, even when the analysis is made at NUTS III region level, only three regions (Greater Lisbon, Greater Oporto and Baixo Vouga), corresponding to the metropolitan areas or a short distance from them and lying on the coast, exceed this average. In its turn, the NUTS III Tâmega, Alto-Trás-os-Montes and Baixo Alentejo have the lowest values in the index, some 11% below the national average, confirming separate analyses which point to a significant concentration in Norte Interior and Alentejo of regions with a less favourable economic performance.

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The use of the composite human development index makes it possible to define, compared with the possible maximum values of this index, the development deficit of the different regions of the country. This is summarised in the following table:

Table I-4

Composite human development index Overall development deficit − 1997

Region Deficit

North 20.3

Centre 21.2

Lisboa e Vale do Tejo 13.2

Alentejo 24.0

Algarve 19.7

Autonomous region of the Azores

22.0

Autonomous region of Madeira 23.6

Total 18.4

Source: DPP [Department for Prospective Studies and Planning]

It may be concluded, from the development of this index between 1970 and 1997, that a generalised convergence of the situation of the different regions on national territory took place, although it did not allow a situation of equilibrium to be reached. From 1986, the process of economic development which followed accession to the European Union and was supported, in part, by the contribution from the Structural Funds, may have accentuated the rift between the coast and inland areas, particularly in terms of new economic opportunities, although the application of CSF II has, according to evaluations carried out, made the overall reduction of regional disparities in the country in terms of per capita GDP possible. Yet this situation did not hinder the establishment of new business centres in regions with a lesser tradition of economic initiative, facilitated by the effort made as regards accessibility, which allowed adequate access to most of national territory. On the other hand, the rise in regional disparities at the first stage of the development process is a phenomenon which occurs with some regularity (due, mainly, to the greater dynamism of some centres of growth) and which tends to be corrected at subsequent stages. From the point of view of the labour market, major disparities, resulting mainly from the differentiated regional impact of sectoral restructuring developments and the emergence of territorial areas with specific problems are also to be seen. The differences between regions, especially as regards the rate of employment, seem to have been aggravated between 1993 and 1997. Thus, whereas in the Centre a major increase in this rate in the period in question is to be seen, the Azores and Madeira recorded decreases in this sphere. Another striking factor is the relative concentration of the impact of unemployment in major urban areas and some rural areas, especially those on extensive agricultural land. 4.9. EQUAL OPPORTUNITIES Equality of treatment between men and women is a basic principle of Portuguese law. As well as being enshrined in the Constitution of the Republic and in other statutes which lay down a complete and cohesive set of rules in this sphere, Portugal also has a variety of institutions whose objective is to contribute towards greater equal opportunities for people of different sexes. The most recent and most significant example of these institutions is the Ministry for Equality, recently created within the Portuguese government. However, this constitutional and legal recognition of equality has still

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not allowed actual equality between men and women to be achieved. The progress recorded in recent times and resulting, in the main, from increasing access by women to economic activity and the labour market and their heavy involvement in higher levels of education and culture (with the possibilities of economic independence arising therefrom), has not been enough to ensure full equality. For some decades now, women have constituted the majority of the Portuguese population (51.8%). Life expectancy is significantly higher for them than for men (78.65 years compared with 71.4 years in 1997). In terms of scholastic skills, the proportion of women without any education is also higher, a situation which reflects the very high rates of illiteracy among more elderly women. On the other hand, the presence of women at higher levels of education is already significant and represents, for example, more than half of the higher and secondary education population overall. If we were to consider the levels of utilisation in relation to which a rate of progression and constantly higher conclusion takes place in the case of girls, the situation described shows a tendency towards even more profound change. It is important, however, to mention the small numbers of women following post-university courses and scientific and technical courses. Along the same lines, a detailed analysis of the sectors of studies followed by women shows a series of aspects which contribute towards maintaining current trends in the educational system and a more favourable general situation for women in the employment system. What are involved, on the other hand, are the orientation, in secondary education, towards general courses to the detriment of technological and professional courses, their low representation in the apprenticeship and initial qualification system (thus making the transistion from school to working life difficult) and the small numbers of women following courses in vocational schools which are orientated towards traditionally male professions. A striking phenomenon in recent times has been the increasing access of women to the labour market, resulting in greater participation in economic activity, more than that recorded in the majority of other European countries but still less than that of men. Thus in the period 1992-1998, the rate of global activity on the part of women went up from 41.3% to 44% (56.3% and 57.2% in the case of men). In 1997, the proportion of women working in Portugal (49.4%) was higher than the average rate in countries of the European Union (45.6%). However, it should be pointed out that women’s employment and activity profiles are governed more by factors such as age, marital status and the existence of children and scholastic skills. The sectoral structure of female employment continues to be marked by horizontal segregation, whose characteristics basically consist of a concentration of female employment in the services sector (59.4%, in 1998). The proportion of female employment in the primary and secondary sector rose to 15.5% and 25.1% respectively. Among the main activities traditionally performed by women are personal services, clerical work, commerce and the professions, while activities linked to equipment and intermediate goods, construction and transport, and independent activities, are heavily dominated by men. Employment in the public sector has, for its part, been a major opportunity for women. In any case, and despite an average level of education which is higher than that of men, the structure of professional qualifications and skills of the female population is unfavourable, showing a situation of vertical segregation of women on the labour market. Indeed, administration and management posts are essentially occupied by men, both in the public and private sector. Unemployment among women is more widespread than among men: in 1998, the proportion of female unemployment was around 6.3%, being clearly higher than that of men (4% at that time). The same trend is being seen in the case of unemployment among young people and long-term unemployment. Attention still deserves to be drawn to the fact that women constitute about 60% of those undergoing training in vocational training for the unemployed.

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There are, on the other hand, significant wage differences between the two sexes, which are to be seen not only in economic sectors (traditional activities with low wages and low levels of qualification) and professional categories in which women are integrated but also, occasionally, the existence of true cases of sexual discrimination. Data from EUR 15 for 1995 show that marked differences in wages and remuneration are to be observed in Portugal, with women’s wages representing only 71.7% of corresponding men’s wages.

5. ASSESSMENT OF THE RESULTS OBTAINED BY THE COMMUNITY SUPPORT FRAMEWORK II (1994-1999)

5.1. STRATEGY ADOPTED IN CSF II 5.1.1 The strategy followed in CSF II stemmed from strategic options for the period 1994-99, being based on the two major objectives already present in CSF I:

• real convergence between the Portuguese and Community economies;

• promotion of economic and social cohesion internally. These objectives were pursued through four priorities, corresponding to the broad lines laid down for the development of the country:

• to enhance the skills of human resources and raise employment;

• to strengthen competitiveness factors;

• to promote the quality of life and social cohesion;

• to boost the regional economic base. 5.1.2. CSF II was approved by a European Commission Decision of 28 February 1994. This initial decision covered 14 programmes and provided for a total investment of about ECU 26 678 million, distributed as follows: ECU 13 980 million for financing the Structural Funds and the FIFG and ECU 6 056 million for national public financing, to which would be added planned private financing of ECU 6 642 million. The co-financing sum made available by the Structural Funds and the FIFG was further supplemented by an indicative sum of ECU 2 601 million originating from the Cohesion Fund. A little later, twelve Community initiative programmes were negotiated which collectively represented a sum of investment of the order of ECU 1 913 million (Structural Funds and FIFG: ECU 1 041 million; public national contribution: ECU 486 million; private financing: ECU 386 million). Subsequently three other Community initiative programmes were additionally negotiated and approved. 5.1.3. The strategy defined by the national authorities and confirmed by the European Commission was based on the following premises:

• Portugal’s development would have to be achieved via the following three great priorities: the effective utilisation of the human resources, the modernisation of the fabric of production and the improvement of infrastructures;

• the measures in the three spheres referred to would lead to a reduction in regional disparities with resulting positive effects on social cohesion;

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• the measures for the modernisation of the fabric of production and infrastructures would

contribute towards improving the quality of the environment and the quality of life. 5.1.4. In terms of impact on socio-economic development, a convergence of per capita GDP with the Community average of the order of 6% was expected in the period 1994-1999, half of it being induced directly by Community support payments, as well as the creation of about 100 000 new jobs. On the other hand, and despite the regional perspective still not being prioritised, the CSF had regional convergence as its objective, with the reduction of regional disparities - at least at the rate recorded in the decade 1981-1991 - as its goal. 5.1.5. In percentage terms, the distribution of Community subsidies by the various Structural Funds was as follows: ERDF 52.6%, ESF 18.9%, EAGGF 11.4%, FIFG 1.3% and Cohesion Fund 15.7%. On the other hand, its distribution by major areas reveals that first priority was accorded to the Modernisation of the Fabric of Production (31%), followed by the Regional Economic Base (23%), the Effective Utilisation of Human Resources (22%), Infrastructures for Support for Development (14%) and, finally, the Quality of Life (9%). 5.2. ASSESSMENT OF THE RESULTS OF CSF II 5.2.1. Macroeconomic impact In macroeconomic terms, CSF II acted both on demand and on supply. The effect on demand is more immediate and tends to vanish over time, while the effect on supply has a slower efficiency timewise but tends to be permanent in the long term. It is estimated that this effect on the supply side is reflected, in the long term, in a real product about 1.6% higher than that which would exist without the CSF. As regards the effect of the demand side, it may be pointed out that in 1999 the real GDP will have to be 3.3% higher due to CSF II, which implies, for the period 1994-99, an increase in the yearly average growth in output of approximately 0.53 percentage points (pp). The convergence of the per capita GDP with the Community average will have to be higher than the 6% initially anticipated. The CSF will have been responsible for the establishment of 106 000 jobs, of which some 30% are in the civil construction sector; as a result, the rate of unemployment will have to be about 2 pp lower in 1999 (considering national and Community contributions jointly, the global effect of CSF II is reflected in the higher GDP in 1999 of about 4.5 percentage points, as well as in an increase in employment of 180 000). Real wages were about 5 pp higher in 1999 due to the CSF. 5.2.2. Impact of CSF II on the development of regional disparities Considering the existing data for the period 1993-99, Madeira shows the greatest growth per capita in GDP (+8.6%) in absolute terms, followed by Centre (+6.9%), Alentejo (+6.8%) and North (+6 0%). The other regions will have to record an increase in per capita GDP of about 1.9% in Lisboa e Vale do Tejo, 0.8% in the Algarve and 0.5% in the Azores. The fact that the estimated value for the whole of the country in 1999 entails going beyond the objective of the CSF to lessen the distance towards the Community average by 6% should also be noted. As regards regional disparities, measured by the coefficient for change in per capita GDP (gpc) values, observed in 1993 and calculated for 1999, it is concluded that the cohesion between Portuguese regions will have to be increased by about 15.4% at the end of the period. The absence of CSF II would have meant levels of per capita GDP below those shown previously in all the regions. 5.2.3. The most favourable cases of impact were recorded in infrastructures and the environmental sphere, while in the innovation and research and development sector this this impact was less apparent. This sector thus requires special attention, all the more so since longer waiting times are needed to procure effects, if this is what is involved.

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The operationality and global efficiency of the management systems contributed towards the rates of financial execution of CSF II being, on average, extremely positive, especially when compared with those recorded in the other Member States benefiting from support from the Structural Funds. 5.2.4. On the other hand, one of the more prominent aspects of the mid-term assessments relating to ESF measures in CSF II was the lack of a clear delimitation of the measures, both in terms of laying down measures and of groups of recipients. This vagueness led to some situations of competition between programmes and maladjustment in relation to the objectives initially established. In specific terms, the recommendations made in the course of the mid-term assessment process for the sphere of human resources were as follows: Training and Employment • the reinforcement of the Local Employment Initiatives, support for employment in the context

of undertakings for integration, the system of learning and the drawing up of integration courses;

• promotion of the links between the CSF II programmes and Community initiative measures in the sphere of training and employment, with a view to facilitating the transfer of experiences and results of transnational projects, particularly in the case of training methods and support for employment;

• adaptation of the supply of training to sectoral and regional needs;

• the rationalisation of the supply of training through the development of mechanisms which assure quality in the administration of vocational training, from the diagnosis of needs to back-up and assessment, via the design of programmes and the organisation of training.

Education • reinforcement of support for the continuing education of teachers and administrative heads in

the educational system, as well as of support for pilot projects in the context of distance education, including the teaching of new information technologies, with the objective of concentration in the decisive spheres of the educational system;

• reinforcement of support for secondary education, particularly through the establishment of alternative courses and the development of technological and professional instruction.

Social integration • establishment of partnerships whose aim is the implementation of a “regional network for the

qualification and employment of the disadvantaged social groups” and a clearer definition of the institutions and strategies for intervention in the face of specific problems in connection with the socio-economic integration of these groups;

• reinforcement of support for NGOs which constitute a valuable instrument, given their proximity to the populations to be covered by this type of measure;

• developing links between investments (financed by the ERDF) intended for disadvantaged social groups and the policy of training (which includes guidance, advice and pre-training).

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CHAPTER II - STRATEGIC GUIDELINES

A. - GLOBAL STRATEGY 1. DEVELOPMENT ANALYSIS The strategic guidelines of the third CSF are drawn up on the basis of an analysis of the main opportunities for the development of the Portuguese economy and of the threats which may compromise the process of economic growth and approximation to the average levels of well-being in the other Member States. Below are set out the most important factors which, in this perspective, allow the priorities of action defined in the third CSF to be justified. 1.1. OPPORTUNITIES FOR DEVELOPMENT 1.1.1. Internationalisation of the business sector In a general context of economic activity characterised by the increasing integration of the country in the European area, an appreciable proportion of Portuguese undertakings have demonstrated the capacity to draw up internationalisation strategies which, in some cases, accompanied their diversification to new activities and, in others, ensured the extension of their traditional areas of skills to abroad. Undertakings from different sectors (financial, services, construction and public works, energy, etc.) invested significantly outside the country, reflecting a pattern of internationalisation closely akin to developed countries and contributing towards broadening the country’s commercial opportunities. This behaviour was accompanied by a pronounced openness to outside in the distribution sector with the resulting modification of domestic patterns of consumption, and by increasing external activity by way of commerce or integration in networks organised by major international operators of a diversified combination of small and medium-sized undertakings supplying quality products and subcontracting services. 1.1.2. Information society The development and rapid modernisation of telecommunications networks and audiovisuals can lessen the disadvantages resulting from geographical situation and contribute towards enhancing the attractiveness of Portuguese territory in international terms. Indeed, the distance from centres of consumption can only constitute a negative factor of competitiveness as regards the goods and services which may be supplied through the use of the new communication technologies. An essential factor is that the countries and peripheral regions should show the capacity to draw up strategies which combine, on the one hand, integration in the major international sea and air routes and in trans-European terrestrial networks and, on the other, the development of the telecommunications networks that allow the opportunities afforded to the information society to be used to advantage. On the other hand, the availability of advanced telecommunications systems constitutes an essential elemement in reducing the impact of ultraperipheral location and is particularly relevant in drawing up the development strategies of Madeira and the Azores.

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1.1.3. Geographical situation The country’s geographical situation on the Atlantic seaboard of Europe confers a special position on it which can be employed to advantage as a development opportunity. Indeed, Portugal possesses specific advantages which allow it to play an important part in circuits for the distribution of information, services and goods. Among these advantages the following are prominent:

• the existence of port infrastructures with good natural conditions for the operation of ships of average and large capacity and providing competitive advantages as regards transport time in links between Atlantic maritime corridors and the interior of the Iberian Peninsula;

• the existence of conditions for the development of the combined transport of goods by road, rail and sea;

• decongested airspace in Europe overall;

• good penetration in some specific markets of Latin America and Africa. 1.1.4. Natural conditions and historical and cultural heritage Portugal has natural and human landscape conditions (favourable climate, long lengths of beaches, size and diversity of the coastal fringe and river system, a wealth of historical and monumental heritage) which are particularly well-adapted to leisure activities and they allow, in addition to the type of tourism traditionally found in Portugal, the development of new activities in market segments subject to rapid growth, such as health and convalescence tourism. On the other hand, installed hotel capacity also exists, with good conditions for the holding of conferences and international events and suitable organisational infrastructures which exploit factors of differentiation (craft trades, gastronomy, etc). Tourism can represent a major element in national economic growth strategy, with a significant effect on keeping and creating jobs. Support for a “cluster” linked to leisure activities and centred around tourism supply capacities, particularly with a view to attracting senior citizens from rich countries and increasing exports of services directed at institutional customers, constitute a possible opportunity from the point of view of the development of the country. 1.2. DEVELOPMENT PROBLEMS 1.2.1 Productivity 1.2.1.1. Economic progress in recent years has been based on the rapid accumulation of physical capital, reflecting high rates of private and public investment. This development has not, however, been expressed in corresponding increases in productivity, which are dependent, on the one hand, on the correction of deficiencies as regards the qualifications and skills of the active population and, on the other, on the establishment of an efficient scientific and technological system aimed at stimulating innovation and technological diffusion. 1.2.1.2. Low average levels of qualifications and skills The shortcomings as regards qualification recorded in the age groups 25-64 years are particularly worrying, having regard to the profound sectoral changes to which the development of the economy will necessarily lead. The systems of education and training have a weak experimental component, generating unadapted skills both in relation to profiles of employment with greater potential demand and to the need for the development of horizontal skills which facilitate professional reintegration. To correct these imbalances, significant investments are needed in specific measures for (initial and continuous) training and in infrastructures and equipment in relation to which deficiencies are to be seen that

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must be accompanied by structural adjustment measures, reflecting the transition to an educational system based on lifelong learning (the possibility of acquiring transversal skills, the definition and generalised application of systems for the accreditation of knowledge and skills, the final certification of educational courses, etc.). 1.2.1.3. Reduced importance of research and development activities in the Portuguese economy and society Without prejudice to the appreciable progress achieved through the major effort of financing scientific and technological infrastructures made in the context of CSF I (CIÊNCIA and PEDIP1 I programmes), or to the significant support for research projects, including research projects in association, carried out under the Community initiative STRIDE and, mainly, by CSF II (PRAXIS XXI programme), the Portuguese scientific and technological system is in position which is far from satisfying the needs of the national economy and society. It is important to continue with support measures for training the human resources needed to ensure the global quality of the scientific system which must constitute the basis of the mobility of qualified human resources (teachers and, mainly, doctors) in relation to all sectors of activity (businesses, universities, administration). The high current shortfall of qualified human resources makes it possible to develop measures of this type without the need for exaggerated concerns as regards the professional opportunities opened to new researchers Indeed, in response to the demands of international competition and as an essential condition for boosting competitiveness on which their survival depends, it may be anticipated that demand from undertakings should be increasingly orientated towards assets of this type. Support for the system of innovation constitutes a second priority. The concept of innovation must be understood broadly, covering the consolidation of skills and the improvement of undertakings’ organisational and management capacities, and including measures for the training of entrepreneurs and executives by, in particular, reinforcing the advanced training component in the investment projects of undertakings. 1.2.2. Peripheral situation Portugal is disadvantaged by its peripheral situation in Europe and the remoteness of its undertakings from the main markets and centres of economic decision. With this in mind, it is important to promote the establishment of activities, technologies and infrastructures which, by shortening the distance, allow the position of the country in the European and world economy to be changed, particularly through recourse to the opportunities afforded by the information society. This also entails special attention to the training of human resources in this area. 1.2.3. Transport system Notwithstanding the significant progress made since Portugal’s accession to the European Union, there are still inadequacies in the country in the sphere of basic infrastructures which contribute towards aggravating the competitive disadvantages resulting from the peripheral situation, both as regards economic activity and the quality of life of the population. In this context, it is important that discussion of the transport system should be closely associated with consideration of the aspects linked to the internationalisation of the Portuguese economy and its integration in the European and world economies. Indeed, recent trends have led to greater dependence on road transport and the relative loss of importance of maritime transport, which leads, in Portugal’s links with the world, to a marked dependence on mainland routes and, accordingly, on decisions taken on this subject by the Spanish authorities.

1 Specific Programme for the Development of Portuguese Industry – Translator.

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1.2.4. Regional disparities Despite the positive development recorded between 1970 and 1997, Portuguese regions continue to have profound differences by reason, in particular, of the high concentration of national industry on the coastal strip of the country between Viana do Castelo and Setúbal, and in metropolitan areas. The population is in natural regression throughout almost all the territorial units of the interior of the country, and this reduction is accompanied by the abandonment of many small rural communities. These imbalances entail high incidental costs in terms of appropriation with equipment and infrastructures in a large part of national territory. For their part, demographic ageing and depopulation require the adaptation of currently existing equipment in many areas of the country. 1.2.5. Urban network The Portuguese urban network is characterised by a twin-pole structure supported in the large metropolitan areas of Lisbon and Oporto (with 2.5 and 1.2 million inhabitants respectively) and in a scattering of urban centres situated mainly in coastal areas and which are small by international standards. The population and economic concentration in the two bigger conurbations, combined with the inadequacies recorded - mainly as regards the supply of services and quality of life in other cities - causes major tensions. Restructuring of the territory, based on the need to improve regional balances and consolidate the role of the intermediate cities with a view to promoting the development of the interior and ensuring the existence of alternative destinations for a population increasingly deserting rural areas for Lisbon and Oporto, seems indispensable. 1.2.6 Structural fragility of agriculture The importance of Portuguese agriculture and forestry in the economy as a whole has come to diminish, especially over the last ten years. However, agriculture/forestry is still of considerable importance in the Portuguese economy on account of its contribution towards total employment and the GVA. In Portugal, highly differentiated agricultures co-exist, particularly as a result of regional disparities, pedological/climatic conditions and certain structural weaknesses. Among these may be singled out:

• agrarian structure with the predominance of small and very small holdings and fragmentation of forest property, making efficient production difficult in many situations and leading to a weak link between production and industry and difficulty of integration in the market;

• the drift from the land, with the consequent depopulation of some territories, leading to agricultural producers being very elderly, a problem aggravated by their low level of qualifications and vocational training;

• insufficient investment capacity, which is clearly dependent on the system of incentives in many segments;

• difficulty in assuring continuity and uniformity of supply and the normal provisioning of the markets;

• insufficient association and the inertia of some segments of the cooperative sector. Attention should still be drawn to efforts carried out by the sector towards its adaptation to the new conditions of activity resulting from European integration (and, in particular, the common agricultural policy and the opening of the internal market), and to the situation arising from the integration of Portuguese agriculture in an international environment characterised by the gradual liberalisation of agricultural and commercial trade.

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SWOT ANALYSIS PORTUGAL

STRENGTHS

WEAKNESSES

Solidly established democratic system; political stability and reduced degree of social conflict; Extensive openness of the economy to outside and tradition of presence on European markets; Rapid process of nominal convergence which led to the country’s inclusion in the nucleus of Member States present at the beginning of the 3rd phase of EMU; Increase in frequency of school attendance in all grades of education, with prominence in the case of pre-school and higher education; Flexibility in the operation of the labour market and high rate of female activity; Existence of a vast array of social solidarity institutions which, in collaboration with the State, can contribute towards the implementation of programmes to combat social exclusion; Process of privatisations and liberalisation which allowed, in particular, the modernisation of the financial sector, the infrastructure (cf. electricity, gas and telecommunications) and distribution sector and a selective withdrawal of heavy sectors of less competitive industry; Existence of a diversified number of dynamic SMUs in the course of internationalisation, via commerce and integration in networks organised by major international operators, and supplying products or subcontracting services of good quality; Process of internationalisation - via direct investment - of large undertakings in the industrial sector, of infrastructure sectors and financial sectors and the sector for distribution outside Europe (Latin America, North Africa and South Africa); Strong dynamics of internationalisation of the distribution sector with the significant presence of major international marks in the main cities, allowing broader strata of the population to be aligned more with patterns of European consumption

Problems of operation and efficiency in basic areas of the rule of law, justice and public administration; Difficulty of execution of reforms in crucial areas of state action - particularly those of health, social security and taxation – which not only allow the future financial sustainability of the major social systems and better coverage and efficiency in their operation but ensure a balanced budget in the face of foreseeable demographic developments; Geographical position of the country, entailing risks of peripheralness, unless it is changed by technologies that lessen the importance of distance, by alignment with international routes, the improvement of the qualifications and skills of human resources and the networked operation of various types of institution; Industrial fabric with manifest expression of activities greatly exposed to competition from developing or emergent economies and a high territorial concentration of some of these most exposed activities; Deficient level of qualification on the part of the active population, especially the intermediate or final age strata, increasing the risks of structural unemployment following profound sectoral reconversions; Significant levels of school failure and deficient performance in crucial areas like mathematics and other sciences in general; Educational and training systems with a weak experimental component and generating partly ill-suited skills in the case of profiles with a higher potential demand and/or which are more necessary for the development of horizontal skills needed in multiple sectors of activity; Backwardness in amassing basic knowledge in information and communication technologies and insufficient mobilisation of the young for training in areas associated with them;

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SWOT ANALYSIS

PORTUGAL

STRENGTHS

WEAKNESSES

Accelerated modernisation of the tele-communications/ audiovisual system, facilitating better internal and external connectivity and the diffusion of products and activities using “cyberspace”; Membership of the main Portuguese business centres, in financial services or in distribution activities for experimentation in the sphere of the e-commerce; Concentration of diversified professional, scientific and artistic skills, particularly in metropolitan areas, favouring the development of advanced forms of tertiarisation and the establishment of undertakings of a more technological nature; Existence of a number of medium-sized towns in economically dynamic regions which will be able to allow a more balanced urban network to be created which drives forward the development of the territory as a whole; Partial recovery of the quantitative shortage of dwellings associated with a construction boom stimulated by the purchase of one’s own house; Substantial improvement in the field of infrastructures for health services;

Low productivity, associated with the low levels of qualifications/education, deficient forms of organisation and interlinking and with the concentration of products at the base or occupying intermediate positions in chains of value; Weak development of the stock market and business structures little inclined to open their capital on the Stock Exchange; Insufficient sophistication of the financial system, which does not allow it to support the establishment and development of undertakings and projects with strong content in terms of innovation/ products, processes, technologies and forms of organisation; Weak capacity to attract international investment for projects having a structuring effect, both in the industrial area and in services of greater added value and/or strong international demand; Problems of the urban system centred (i) in the inadequate driving role and in the international planning of metropolitan areas where the most serious restrictions on the welfare of populations accumulate; (ii) in the diffuse urbanisation typical of the north and central coastal area which makes it difficult to obtain the critical mass for the installation of the infrastructures and services needed for competitiveness and well-being; (iii) in insufficient cooperation between urban centres, with especially worrying consequences in inland regions; Existence of situations of social exclusion and poverty requiring the structuring of a social network of support involving public and private institutions;

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SWOT ANALYSIS

PORTUGAL

OPPORTUNITIES

THREATS

Membership of the European Union, as a major commercial, monetary centre and attracting capital on a world scale; Geographical position that facilitates direct linking to the major routes for the transport of containers by sea and conveyance of passengers by air which link Europe to other continents; Climatic, environmental and cultural heritage characteristics favourable to the diversified development of tourism and to attractiveness to the third age European population; Existence of “potential anchorage points” for outside investment in the dynamic areas of Asia –particularly China and India – supplementing traditional ties with Latin America and Africa; Development of activities in “cyberspace”, drastically reducing the drawbacks associated with distance, as factors limiting competitiveness; Existence of a decentralised network of universities, polytechnics, research centres and institutes and technological infrastructures for support to industry which will be able to contribute towards the modernisation of activities and the enrichment of operations; Availability of a skills base, particularly in computer and information technology sciences and in biology, health and biotechnology sciences which could be developed as a factor of future attractiveness for operations of a more technological nature; Existence of a road map which will allow the completion of major priorities for the structuring of the territory which they simultaneously organise, international land access and the priorities of internal territorial cohesion; Existence of a programme of investments in infrastructures for water supply, basic sanitation and the collection and treatment of waste, which will contribute towards improving environmental quality; Existence of a programme of investments in the water/agricultural and multi-use water sector which will allow irrigation farming and agrifood activities to be developed; Potential for the extension of the forest area and for the consolidation and upgrading of the timber, paper, cellulose, packaging and cellulose fibre industries.

Opening of the European single market to strong competition from developing economies in the context of the EU’s trading policy, which is favourable to the establishment of free trade areas and agreements with countries and regional groups; Occurrence of a phase of slow growth in Europe, with strong repercussions in an economy strongly integrated in the European and Portuguese market; Endogenous difficulty in achieving strong rates of growth of products and productivity, opening up tensions between competitiveness and employment, due in part to a weak dynamism in transforming the structure of production; Occurrence of strong simultaneous competitive pressures on the agricultural basis of subsistence of small properties in the north and the central coastal area and on traditional industrial sectors, whose labour force maintains significant ties with agriculture based on the ownership of small plots of land; Vulnerability of recently-developed “proto-clusters” (like that centred in the motor car sector) in the face of decisions by a very small number of major international operators; Emigration of highly competent executives and professionals on account of the difficulty in carrying out modern and competitive activities in Portugal capable of retaining qualified national and foreign manpower; Concentration of the main geo-economic functions of peninsular space in Spain, reducing interest in Portugal as a location for industrial or logistic activities; Disordered over-exploitaition of environmentally vulnerable and economically valuable areas, leading to the loss of the natural characteristics that made them valuable; Inability to transform the metropolitan areas of Lisbon and Oporto into driving forces for transforming the country’s profile of activities and international links; Difficulty in strengthening medium-sized towns inland, agri-environmental activities and the competitive centres of agricultural production to combat the desertification and ageing of vast areas of the country.

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PORTUGAL Socio-economic characteristics

Year Unit Demographic and social indicators

Area 100 km2 919 Population 1997 103 9 957.3 Population density “ inhab./km2 108.3 Birth rate 1997 ‰ 11.4 Death rate “ “ 10.5 Ageing index “ % 88.5

Health Hospitals 1997 No 215 Doctors per 1 000 inhabitants “ ‰ 3 0 Beds per 1 000 inhabitants “ “ 4 0

Education Number of pupils

Primary 1998/1999 No 1 158 794 (1) Secondary “ “ 381 118 (1) Higher “ “ N/a

Educational establishments Primary 1995/96 No 12 874 Secondary “ “ 664 Higher “ “ 290

Net primary school enrolment rate 1996/97 % 82.1 (1)

Level of scholastic education in age strata 25-64 years

1998 % 80% ≤ 9th yr 10%=12th yr 10% >12th yr

Culture and Recreation Newspapers and magazines – Yearly circulation 1995 103 522 670 Museums “ No 341 Libraries “ “ 1 614 Public entertainment - performances “ “ 150 645

Economic Indicators GVA pm 1996 ESC 106 15 368 681

Primary Sector “ % 4.1 Secondary Sector “ “ 33.9 Tertiary Sector “ “ 61.9

GDP/inhab. 1997 ESC103 1 797

Disposable per capita family income 1995 “ 1 137 Rate of Poverty (3) 1995 % 22.7 (1) Employment 1998 103

4 738.8 Primary Sector “ % 13.5 Secondary Sector “ “ 35.8 Tertiary Sector “ “ 50.7

Rate of Activity “ % 50.0 Rate of Unemployment “ “ 5.0

Rate of female unemployment “ “ 6.3 Rate of youth unemployment “ “ 10.2

Long-term unemployment (4) “ “ 42.6 Environment (2)

Water supply 1997 % 86 (1) Waste water drainage “ “ 68 (1) Urban waste water treatment “ “ 40 (1)

Treatment of solid urban waste “ “ 24 (1) Comfort indicators

Dwellings with Internal running water 1997 % 93.2 Fixed installations – Bath/shower “ “ 89.1 Installations with telephone “ “ 79.7

Transport and Communications Road network 1996 Km 9 742 (1) Main routes “ “ 2 558 (1) Supplementary routes “ “ 2 416 (1)

(1) Mainland (2) Global levels of attendance (3) Percentage of population below poverty threshold (population with income below 50% of national average income/total population) (4) Unemployment for more than 1 year

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INDICATORS OF MACROECONOMIC PERFORMANCE

1986-1999 2000-2006

GDP per capita (gpc, EUR 15=100, at end of period) 74 79

Labour productivity “ 62 67

GDP (average rate of variation in volume) 3 1/2 3½

GDP (average rate of nominal variation) 12 1/4 6

GDP growth differential (percentage points) 1 1

Employment (*) “ 3/4 ½

GFAF of administrative public sector (as % of GDP) 4 4

GFAF of the private sector (**) “ 22 25

Exports “ 31 37

Imports “ 39 48

Deflator of private consumption (average rate of variation) 7 3/4 2

Global balance of the general government

balance

(as % of the GDP, end of period) 1 3/4 0

Public debt “ 57 43

(*) Expressed as number of individuals (**) Includes public undertakings Sources: 1986 – 1999: DPP and INE 2000 – 2006: RDP macroeconomic scenario

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2. STRATEGIC OPTIONS AND PRIORITIES 2.1. Integration The present CSF defines the main strategic priorities of intervention from the Structural Funds in Portugal for the period 2000-2006, reflecting the results of the negotiations between the Portuguese authorities and the European Commission which allowed specific objectives for the spheres of intervention accepted to be identified. The third CSF will contribute towards pursuing Objective 1 in Portugal, through the balanced and sustainable development of economic activities, employment and human resources, with the correction of social inequalities still being favoured. As transversal dimensions for the different main priorities, the third CSF ensures the protection and improvement of the environment, the promotion of equality between men and women and the development of a knowledge-based society and innovation. The sums provided for by way of financial support from the Structural Funds are evidently adequate for the objectives laid down, as there is equilibrium between the strategy proposed and the financial resources planned. Considering the general objective of an increase in productivity, viewed as a necessary condition for remedying Portugal’s structural backwardness, as the main thread of the action of the Structural Funds in the present programming period, the CSF is adopting the following priority spheres of action:

• Maximising human potential • Support for productive activity • Structuring of the territory

2.1.1. Maximising human potential The priority given to maximising human potential stems from the finding that low levels of productivity result, in the first place, from the relative backwardness of the country as regards education and training of the population. The improvement of the population’s qualifications constitutes the indispensable prerequisite for the modernisation of Portuguese society and the affirmation of the factors of competitiveness of the economy, especially with a view to the establishment and consolidation of a knowledge-based society. This priority of public action entails significant efforts in the sphere of education, training and employment, as well as the setting of ambitious objectives as regards reducing national backwardness in the field of innovation, science and technology. At the same time, measures are supported which focus on the consolidation of social solidarity and take into account the needs of citizens, mainly from the most disadvantaged strata of the population. With this in mind, the third CSF provides for specific measures in the sectors of health, social development and culture. 2.1.2. Support for productive activity In the context of support for productive activity, measures are established which are directed at the overhaul of the economy, the modernisation of the scientific and technological system and the improvement of basic economic infrastructures, where this is compatible with the imperatives of the conservation of the environment. The pursuit of these objectives involves the continuation of the structural reforms of the Portuguese economy, particularly the reforms of markets for goods and services, the stock market and the labour market and, at the same time, coordinated action of public

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policies on the legal and administrative integration of economic activity, with a view to facilitating the necessary changes in the national business fabric. In the economic and financial perspective, the intention is to consolidate the foundations of a continuous process of wealth creation which makes it possible, in the long term, to go beyond deficit situations in terms of public finances and the balance of current transactions. The existence of higher levels of income is indispensable to generate tax revenues which allow the significant impact of Community funds in the Portuguese economy to be substituted at the opportune time.

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INNOVATION SYSTEM FRAGILE ASPECTS OF THE SYSTEM In Portugal, some aspects of the innovation system are fragile, as may be seen below: Lack of interlinking between the scientific system and the business system,

resulting in major shortcomings in the dissemination of technological information and economic intelligence.

Inadequacy of the financial mechanisms placed at the disposal of scientific and

business systems, leading to difficulties in obtaining capital or credit which facilitates the development of innovative projects or the establishment of new undertakings.

Insufficient openness to outside and internationalisation, preventing the

establishment of alliances with foreign partners in the business, financial, scientific and technological sectors, or with educational and training institutions.

Insufficiency of human resources in the professional profiles linked to critical

factors of competitiveness. Fragility at the strategic top of undertakings, reflecting the scarcity of managerial

staff and the deficiencies in their training and qualifications in the majority of undertakings – notwithstanding the appearance of a new generation of undertakings and entrepreneurs.

ACTION PRIORITIES Public intervention must be guided by a set of specific priorities and be based on an effective coordination of the different instruments of action, with particular attention being paid, in the measures financed by the third CSF, to the links between the programmes for Education, Employment, Training and Social Development, Science, Technology and Innovation and Economy. With this in view, the third CSF must incorporate, explicitly and systematicatically, an integrated policy for the support of innovation with the following features: Interlinking between the university and business sectors Support for research

projects on a joint basis between scientific institutions and undertakings and for initiatives aimed at facilitating the mobility of qualified human resources between universities and the business world must be maintained. Measures for the effective utilisation of research results must be substantially strengthened. A policy to stimulate networks of undertakings, aiming to diminish disadvantages stemming from the country’s peripheral situation will contribute towards setting up conditions which allow the fabric of SMUs to be modernised. Similarly, the internationalisation of the technological system (supporting the internationalisation of the scientific system, to which CSFs I and II gave a vital impetus) in such a way as to promote contacts between national and foreign undertakings and universities, with a view to solving specific problems, must be continued with.

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Stimulaton of demand from undertakings for technological products and services Mechanisms whereby entrepreneurs are listened to and informed as regards the needs of their undertakings and the new opportunities resulting from the integration of innovative products and processes, including training processes and systems of organisation and management, must be established. With this in view, the establishment of a major programme of technological audits and innovation audits (extended to the organisational aspects of undertakings), must be promoted. This programme will have to include measures intended to ensure that the needs revealed are met, through brokering services with a view, in particular, to facilitating the importation of foreign technology.

Financing systems The development of seed and risk capital is

indispensable, but it is important to appreciate the actual conditions under which they operate in Portugal and, as far as possible, to ensure forms of interlinking between the public and private sector by, for example, establishing a system for guaranteeing credits or a security.

2.1.3. Structuring of the territory The objective of increasing productivity is part of a long-term strategy and requires principles of prudent management of the territory which prevent the weakening of resources and natural spaces to be applied. Under these conditions, the development of the country is based on principles of environmental sustainability and economic and financial sustainability. The principle of the effective utilisation of the territory justifies the priority attached to regional development and the environment, and determines the importance granted to Portugal’s geo-strategic position as Europe’s first Atlantic platform. It further demands close coordination between the measures intended to strengthen basic infrastructures in the country, including transport infrastructures and - especially prominent - environment and basic sanitation and those whose objective is the balanced development of Portuguese regions. 2.2 MAIN PRIORITIES AND STRATEGIC OBJECTIVES

2.2.1. Strategic objectives Consideration of the principles and presuppositions referred to leads to the following basic strategic data being identified:

• in the case of economic integration in a world and European context, Portugal must be affirmed as Europe’s Atlantic frontier for Europe;

• as regards the model of economic development, Portugal must accord priority to those

activities, competitiveness factors and technologies which are most dynamic and structuring in the world, and European, economy, in the medium and long term;

• as regards protecting and making the most of its natural heritage, Portugal must adopt a

national strategy for the conservation of nature and biodiversity; • as regards the model of social development, Portugal makes effective use of solidarity and

cohesion.

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It is intended, as as a general objective served by the development strategy adopted, to remedy the structural backwardness which separates Portugal from more developed European countries within the space of a generation. 2.2.2. Main priorities In the context of the guidelines set out, the strategic objectives of the third CSF, corresponding to the priorities of action of the Structural Funds for the period 2000-2006, are as follows:

• Improving skills among the Portuguese, promoting employment and social cohesion

• Modifying the profile of production towards activities of the future

• Asserting the value of the land and Portugal’s geo-economic position

• Promoting sustainable regional development and national cohesion.

The four priorities shown must be understood in a perspective of complementarity, although attention must be drawn to the particular perspective of structural policy, to the importance of their impact on the sustainable development of regions and on national cohesion – bearing in mind the need to correct any economic, social and territorial disparities there might be and provide citizens and economic agents with fair living conditions and balanced opportunities. 3. STRATEGIC GUIDELINES FOR THE DEVELOPMENT OF HUMAN RESOURCES (SUMMARY OF THE FRAME OF REFERENCE) The development strategy pursued in the third CSF lays down as a priority, among others, “Improving skills among the Portuguese, promoting employment and social cohesion.” In this connection, the priorities of action are orientated towards the sustained remedying of the shortcomings referred to, focusing on the following spheres of development of human resources: • Incentive of demand for skills on the part of the occupationally active, close association

between vocational training and support for investments in the modernisation of the fabric of business and consolidation of support for individual courses combining professional and scholastic qualifications;

• Reinforcing the diversification of school courses for young people, with priority being given to

processes which at the same time confer school and professional certification. In this connection, the generalisation of training in the work context (particularly through curricular and professional periods of training) is clearly of importance;

• Bolstering investment in the social and professional reintegration of the unemployed and other

groups with socio-occupational integration difficulties, with special attention being paid to the specific nature of the public involved and investments intended for occupational skills and competence and adaptation to the work context being supported;

• Continuing the investment in advanced training and support for integration of these executives

in undertakings, in conjunction with transversal measures promoting the information society;

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• Priority transversal action at generic equal opportunities level, such action being combined with

positive measures directed at strategic sections of the public; • Decentralising measures for the support of human resources, particularly through the

decentralised and flexible management of a major proportion of available resources; • supplementary support action intended to consolidate the efficiency of policies, expressed in

concrete form in support for systems of education and training, through the qualification of their agents and innovation in methods of action.

On the other hand, the objective of the strategy proposed is changing the economic profile of Portuguese specialisation and constructing a new model which makes competitive assertion compatible with social cohesion. In this context, the success of the present development strategy, which seeks to remedy structural backwardness, is closely associated with, and dependent on, a significant consolidation of efforts in the fields of education, training and employment as well as the progress which has been achieved in science, innovation, culture, social development and health. Measures in the sphere of human resources which, focusing on Priority I, extend to all the priorities, thus assume a character which is decisive for the present development strategy. Consistency with the spheres of policy identified for the ESF in its regulation develops in three fundamental dimensions:

• the centrality of Priority I “Improving skills among the Portuguese, promoting employment and social cohesion” in which the essential elements of measures geared to human resources are integrated;

• interlinking with Priority II – Modifying the profile of production towards activities of the

future – either through the direct participation of measures for qualification of human resources associated with modernisation investments, or through the actual strategic effect of these investments for the promotion of conditions favourable to the creation of employment and the promotion of cohesion;

• integration in Priority IV - Promoting sustainable regional development and national cohesion

- of decentralised measures intended to promote employment and business activity in differentiated regional and local contexts.

The framework of the policy spheres of the ESF, as established in the respective regulation, proved crucial for the conception of measures in relation to human resources. In the following table the interpretation of the existing levels of interlinking between the five policy spheres of the ESF and the main types of measures in the sphere of human resources are summarised.

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Table II-1

ESF policy spheres Target sections of the public/central approaches

a) Development and promotion of active policies

Unemployed/ active policies

b) Promotion of equal opportunities for all

People with particular problems in connection with socio-occupational (re)integration/instruments especially adapted to mainstreaming action

c) Promotion of the improvement of training, education and advice

Persons not economically active and agents of educational/training systems and employment

d) Promotion of a competent and adaptable labour force

Economically active persons in employment and agents of innovation/continuing education and lifelong learning

e) Specific measures for women Women and agents of change/specific measures and mainstreaming action

The allocation of the resources from the ESF to programmes and measures able to be incorporated in the different policy spheres reflects the priorities selected and is orientated towards remedying the main shortcomings identified in the diagnosis of the situation as regards human resources.

Table II-2

FINANCIAL BREAKDOWN OF THE ESF BY POLICY SPHERES

ESF policy spheres Breakdown of associated financial resources (%)

a) Development and promotion of active policies 14

b) Promotion of equal opportunities for all 16

c) Promotion and improvement of training, education and advice

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d) Promotion of a competent adaptable labour force 29

e) Specific measures for women 1

100 (*)

(*) The values assigned to the Autonomous Regions, integrated development measures and technical assistance have not been considered.

The allocation structure of resources is based on a set of reasons set out below. 3.1. Policy sphere a): Development and promotion of active policies Measures to combat unemployment were included in this sphere, particularly measures associated with early approach, the nucleus area of the National Employment Plan (NEP). Although Portugal has a low rate of unemployment in structural and conjunctural terms, the importance assigned to the early approach represents a major part of this effort. Following a personalised support approach, which is an essential aspect of the NEP initiatives INSERJOVEM and REAGE, priority will be given to promoting the employability of unemployed young people and adults.

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Still in this sphere, attention should be drawn to qualification and requalification measures associated with experiments in bringing undertakings closer together. The national programme of courses of instruction for the unemployed (which caters for over 15 000 unemployed/year) will be incorporated into this line of action. On the other hand, this is one of the spheres where mainstreaming initiatives as regards equal opportunities for men and women will be fundamental. Indeed, increases are provided for in the case of unemployed women over 40. The financial resources associated with these measures will be interlinked with a major national effort to promote the integration of the unemployed through the use of other instruments (reduction of the costs of integrating those unemployed in undertakings who are seeking their first employment, through exemption from social security contributions in particular, the estimated amount of which for the period 2000-2006 approximates to the ESF amount associated with these measures). 3.2. Policy sphere b): Promotion of equal opportunities for all The Portuguese social situation, characterised by the existence of a significant rate of poverty and major elements of social fragility, justifies the special attention paid to this sphere, through which it is intended to reach the most vulnerable segments of the population with greater difficulties of access to the labour market. The resources allocated to this sphere will basically be devoted to active policies directed at groups with major shortcomings in terms of employability, particularly people with a deficiency or who are long-term unemployed and unqualified. Indeed, the importance of the relative extent of long-term unemployment and the characteristics of social fragility associated with them, due to the lack of protection mechanisms, make it advisable to assign high priority to this segment. Attention should be drawn to the fact that Portugal incorporated in its NEP, from 1999 and with 2002 as its goal, a specific quantified objective reflected in the extension of the personalised support approach to all long-term unemployed persons. This objective is expressed in the commitment to provide annually a Personal Employment Plan, with recourse to a methodology identical to that followed in the case of the early approach. In addition to the aspects referred to, the intense phase of economic restructuring which major sectors go through will tend to maintain a considerable potential flow of new unemployed with few basic qualifications. Other lines of action incorporated in this context will be earmarked for segments of the public with particular shortcomings in terms of employability, associated with deficiency problems, problems of individual waywardness (drug dependency, imprisonment, prolonged inactivity typical of social exclusion), as well as problems of cultural and/or linguistic marginality (ethnic minorities). The strategic approach to these segments of the public combines personalised support with the incentive for the development of specific instruments of integration. With this firstly in mind, the integrated approaches of socialisation, guidance, professional pre-qualification, training and support for employment stand out. Secondly, the support granted for integration undertakings, workshop schools, etc. is incorporated. These measures are also subsidiary to support granted for occupational integration in connection with the reduction of the indirect labour costs and will interlink with support for integrated projects for social development in disadvantaged communities.

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3.3. Policy sphere c): Promotion and improvement of training, education and advice This sphere includes measures orientated towards improving the educational system, particularly through promoting the integration of young people in working life, as well as formative measures intended to foster a better match between the initial training of the young and economic and technological changes. Moreover, various measures integrated in it are of primary importance for the activation of employment policies and, particularly, for the prevention of unemployment, an objective associated with sphere a). Transversal measures are also included in this sphere at training and educational system level, with a view to an improvement in its efficiency (measures intended to strengthen the capacity for personalised support on the part of the target public of policies for training and employment and continuing education on the part of teachers). This is a key area in the interlinking between measures in the educational sphere and vocational training field. Given the strong relationship with the priorities of the NEP, the measures to improve the performance of the educational system, with a view to the prevention of unemployment, are incorporated in this sphere. Measures aimed at the qualification of the young (with the great preponderance of those which confer school certification), resultings from the interlinking between the training system, undertakings and both sides of industry, are further associated with them. Since the borderline between this sphere and sphere d) is a tenuous one, it was decided to include here those measures which form part of a view of lifelong training: the training of teachers and trainers and the promotion of adult education. 3.4. Policy sphere d): Promotion of a competent and adaptable labour force Great importance is assigned to the aspect of skills on the part of the labour force and its adaptability, with three basic strategies being established for this sphere: • In the first place, a policy to promote continuing education, which is strongly associated with

the objective of a rise in the qualifications of the employed labour force. This policy will utilise fully the extensive network equipment, structures and institutions specialising in promoting continuing education, with particular emphasis on those which develop intense participation on the part of both sides of industry;

• Secondly, a promotion of the adaptability of the labour force which is closely associated with

investments for the modernisation of businesses and other employing institutions. In this way, the improvement of employability and adaptability is synergetically associated with consolidation of the competitiveness of investments;

• Thirdly, a consolidation of the strategic investment in highly qualified human resources and its

link to working life, in order to further the integration of these professionals, particularly in the scientific and technological spheres.

It ought further to be stated that the investments made via other funds are important in promoting conditions of adaptability.

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3.5. Policy sphere e): Specific measures for women As stated, the national strategy for the promotion of equal opportunities for men and women accords priority to a transversal approach to areas of action collectively. Thus, specific goals, priorities and instruments will be integrated in the various measures which not only guarantee effective equal opportunities, but also the implementation of positive measures in favour of the sex discriminated against in terms of professional and social integration. In this way, the specific measures for promoting participation by women on the labour market will only be demonstrational and measures directed at segments of the public and dimensions having a high multiplying effect from the point of view of the visibility of this priority. The option for the transversality of the dimension of equal opportunities between the sexes is adapted to the Portuguese and fundamentally expresses itself in measures more directly associated with promoting employability and combatting unemployment. This approach is already enshrined in the principle of the systematic increase in support granted in all employment and training policies in situations of gender discrimination. The regulation of initiatives will quantify the extent of this increase (which will fluctuate between 10% and 25%) as it is not possible to establish, at this stage, the overall quantification of the financial effort involved. 3.6. Main areas of transversal action in the sphere of human resources The present development strategy has a differentiated approach to areas of transversal action in the sphere of human resource development. Firstly, the development of the information society which is the target of two complementary schemes of action: • the first, through a special operational measure whose specific function is to shape and certify

basic skills in this sphere and also expand the material conditions of access to the Internet; • the second, through a transversal priority in all the spheres of education and training, either by

creating the necessary conditions for running schools as levers for the development of the information society or by generalising formative components associated with it, and also the economy of knowledge (with this introduction being able to constitute a condition of differentiation in access to financing).

As far as the promotion of local development is concerned, ESF financing is mobilised in three ways, by the: • allocation of specific resources for integrated development measures, in areas of particular

economic and social fragility and for the promotion of human resources at municipal level; • identification of specific measures for the promotion of territorial networks to foster

employment; • implementation of specific measures (also in connection with the ERDF) for support for the

development of local initiatives to create employment.

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Together, these three areas absorb a proportion of the ESF corresponding to 8.5% or so of the total sum. In addition to these initiatives, various strategic interlinks with the promotion of local development can also be found in the sphere of social development. Processes in favour of disadvantaged communities or support for the development of integration units with a strong local status are an example of this. 3.7. The third CSF strategy for human resources and the National Employment Plan The interlinking between the measure in favour of human resources and the European Strategy for Employment and the National Employment Plan also constitutes one of the lines of development of the present strategy. The main contributions to the pillars and guidelines for employment may be identified from the following tables: PILLAR I – TO IMPROVE EMPLOYABILITY Combatting unemployment among young people and prevent long-term unemployment An essential component of the programme for Employment, Training and Social Development, and particularly its Sub-programme 1, in which the allocation of resources to promote the employability of the unemployed is prominent, is directly integrated in this pillar and these guidelines Changing over from passive measures to active ones Also covered in the guidelines associated with this dimension are the same instruments of active policies, particularly those directed at the unemployed. Similarly, the promotion of social development (Employment, Training and Social Development programme –Sub-programme 4) includes a major component of the activation of the policy directed at the long-term unemployed. Stimulating a partnership approach Priority to lifelong training occupies a prominent place in these guidelines and includes, in the third CSF, the Employment, Training and Social Development and Education programmes which attach great importance to this dimension. Facilitating the transition between school and working life The improvement of the educational and training systems focusing on young people covers the two programmes already identified, in promoting alternance training, consolidating initial qualifying education and in the processes of interlinking school/ training/undertakings. Promoting a labour market open to all This dimension comprises a direct contribution from the Employment, Training and Social Development programme through a specific priority.

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PILLAR II – TO DEVELOP ENTREPRENEURIAL SPIRIT Facilitating the start-up and management of undertakings The promotion of entrepreneurial initiative – particularly in SMUs - provided for in these guidelines is, in addition to comprising specific instruments in the context of measures supported by the ERDF, also significantly supported by the ESF in a specific Sub-programme of the Employment, Training and Social Development programme and in measures of the Economy programme. Exploring the opportunities for creating new employment In addition to the generic contribution of measures and priority lines of action to promote employment, particularly at local level, the intervention of the Information society and Economy programmes is an additional feature of this area, with the centrality of the dimension of support for innovation in the development strategy adopted being explored. PILLAR III – TO STIMULATE CAPACITY FOR ADAPTATION Supporting the capacity of adaptation of undertakings This guideline will be supported by the combination of support for modernisation provided for in Priority II of the CSF and in particular by the ESF measures in integrated projects to support the modernisation of undertakings. PILLAR IV – TO CONSOLIDATE EQUAL OPPORTUNITIES POLICIES Integrating the objective of equal opportunities for men and women The consolidation of equal opportunities for both sexes will be developed through priority being accorded to transversal measures and through the effective utilisation of the positive measures autonomised in the Employment, Training and Social Development programme. The development of the European Strategy for Employment, being naturally supported to a great extent by the measures co-financed by the ESF, is also dependent on an extensive set of initiatives which go beyond the present frame of reference. They are, in this case, measures in the sphere of the modernisation of infrastructures and, in particular, the collection of measures which are part of the priority devoted to the modernisation of economic activities, in which a fundamental part of the effort towards adaptability to economic and technological changes is rooted. The interlinking between the two first priorities of the CSF is very close as far as the promotion of an integrated strategy for human resources is concerned. As regards Priority I, what we have is basically an intense and sustained support strategy to raise the qualitative profiles of human resources in a perspective which combines: • more efficient performance by the educational system (at all its levels, from pre-school to post-

university);

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• a consolidation of investment in lifelong training; and • backing for the generalisation of skills associated with the information society and the

knowledge-based economy. In Priority II, a gradual affirmation of a new profile of economic specialisation is planned aimed at replacing fragile competitive advantages by dynamic factors of competitiveness, which are to a great extent rooted in a more intense use of significantly more qualified human resources. In the interlinking between the two priorities in the sphere of human resources, the part played by the support granted by the ERDF must be singled out. In this area, we can estimate that approximately 40% of this Fund will be earmarked either for the promotion of innovation and the development of undertakings or for the modernisation of educational and training systems. The interlinking between these two processes is, on the other hand, stimulated by cross-programme measures of major strategic importance, whether through the association of formative activities and processes of support for the modernisation of undertakings, through the priority allocated to the measures for approximation to professional experience as regards those measures associated with the educational and training system (intensification of curricular and professional courses of instruction) or else through the effective utilisation of investment in promoting entrepreneurial spirit, particularly via both sides of industry. Priority III, which is dedicated to setting up the conditions of support for the sustainable development of the Portuguese economy, further constitutes an important area for creating employment and stabilising the labour market. Priority IV makes it possible to facilitate the dynamism of creating employment regionally and locally. In addition to this aspect, the decentralised dimension of the sectoral measures ensures a restoration of equilibrium of economic and social dynamics, allowing at the same time greater flexibility in identifying the target public of active policies for employment and training, in the context of differentiated conjunctural developments. 3.8. Profile of the measure for human resources Priority I, having these major guidelines of intervention in the sphere of human resources as its referential and assuming, as was already underlined previously, a very central role in the responses constructed, is structured around one major objective: to improve skills among the Portuguese; to promote employment and social cohesion. Fixing this guiding framework for action in this specific sphere reflects a clear intention to promote the development of human potential, especially with a view to creating conditions for the consolidation of a knowledge-based economy in which the qualification of people is the decisive factor. Hence the measures which this Priority covers necessarily stand out in the case of diversified spheres, with the complementary features resulting from this set of measures constituting a guarantee of the objectives laid down being realised. In the following grid, an attempt is made to show the most significant associations between the measures which constitute Priority I and the major objectives pursued.

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PRIORITY 1

Improving skills among the Portuguese Promoting employment and social cohesion

Priorities of Objectives

action Qualification and Employment

Social cohesion Knowledge-based society

Education X

Employment, Training and Social Development

X X

Science and Technology X X

Information society X X

Culture X

Health X X

Since the objective associated with Priority I is complex, the major priorities enabling it to be realised were reflected a set of ten intermediate objectives shown in the table on the next page. Such objectives thus constitute the major pillars of development of the general objective which structures intervention in the sphere of human resources, although the contribution of each of them towards their realisation differs in level and nature. In the collection we now have, objectives of decisive contribution directed towards raising the level of qualifications among the Portuguese may be identified, as well as others whose contribution towards this aim is more indirect. In this group, there are additionally objectives whose contribution is fundamentally reflected in establishing support which will invigorate the implementation of objectives of qualification, social cohesion or the development of knowledge-based society or make it viable. Achieving these objectives depends in turn on a extended combination of measures and instruments of action which cover the different priorities of the CSF. This means that, as a priority relationship exists between the operational programmes which make up Priority 1 and the objectives associated with it, their achievement also depends on the contribution from other priorities.

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Improving skills among the Portuguese, Promoting employment and social cohesion

(table of intermediate objectives) To promote preventive action so as to minimise the risk of

unemployment, in particular by backing the qualification of new generations

To promote lifelong learning and improve the employability of the

active population as a form of preventive action against unemployment

To promote early action as an instrument to prevent risks of long-

term unemployment

To promote action facilitating the social integration of sectors

exposed to long-term unemployment

To promote a scientific and technological culture so as to improve

primary education, contributing towards active citizenship with initiative and responsibility

To promote the development of the information and knowledge-

based society by shaping and certifying skills in information science and technologies and stimulating research

To remedy scientific backwardness (train and qualify, promote inter-

nationally competitive scientific production, establish a modern R & D network, develop the country’s technological infrastructure, mobilise capacity for international cooperation in S & T)

To expand innovation To strengthen culture as a factor of development and employment To improve levels of health efficiency and ensure all citizens have

access to quality health care

B – PRIORITY 1 – IMPROVING SKILLS AMONG THE PORTUGUESE, PROMOTING EMPLOYMENT AND SOCIAL COHESION

Human resources are a critical factor in economic growth, competitiveness and employment. Under the current conditions of the Portuguese economy, it is essential that the country, its undertakings and the government and administration should possess highly qualified human capital with the skills necessary to master the new technologies and high capacity for adaptation. The system of education and training, on the one hand, and the employment system, on the other, play a fundamental role in this sphere. When the measures directed at the effective utilisation of human potential are drawn up in the third CSF, regard must be had to these considerations, thus meeting the needs of the business sector and the labour market.

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B.1 – EDUCATION 1. OBJECTIVES Bearing in mind the context previously described as regards the development of human resources, and especially the analysis carried out of the main shortcomings and severe restrictions weighing on the Portuguese population in terms of its levels of qualification and skills, the Education programme takes on a fundamental role in the pursuit of the objective noted for the measures included in Priority I of the CSF: Improving skills among the Portuguese, promoting employment and social cohesion Indeed, the structural backwardness recorded in Portugal in this sector points to the pressing need to develop an efficient educational policy which is likely to accelerate the process of the country’s convergence with its Community partners. The objectives of the Education programme match the need to develop an educational policy which is mindful of the economic and social needs of the country, in other words capable of overcoming the main obstacles (high rate of school failure, the inadequacy of education to meet the needs of the economy, the departure of young people from the educational system without any preparation or professional qualification, the low level of skills of the active population) in the way of the existence of a qualified human capital, which is an indispensable factor for achieving greater productivity and competitiveness of the economy. Assuming a logic of continuity in relation to earlier programmes, although re-orientating their action so as to respond best to the challenges facing us at the beginning of this decade (in particular the need to accelerate the process of convergence with Community partners, prevent unemployment and prepare young people for information technologies), the Education programme bases its action on four fundamental objectives: 1. To improve the quality of primary education, contributing towards a culture of initiative,

responsibility and active citizenship; 2. To expand and diversify the initial training of the young, with a view to the qualification and

high employability of the active population; 3. To promote lifelong learning and improve the employability of the active population; 4. To guide and promote the development of the information society and knowledge-based society

in Portugal. National and Community funds (ESF and ERDF) contribute towards the pursuit of these objectives; Objectives 2 and 4 are those in which the resources allocated to the measures planned are mostly concentrated. In relation to Objective 1, the intention is especially to intensify effort in the pre-schooling sphere, in other words align the rates of attendance at this level of education recorded in Portugal with those of other Community countries, with the aim of guaranteeing more equal opportunities for all the children entering this basic level of education. In the case of this objective, ERDF intervention is anticipated, in particular, in order to complement the national effort in relation to infrastructures of the National Network for Pre-school Education, and also that of the ESF through the training of teachers and other staff.

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As regards Objective 2, the intention is fundamentally to accord priority to measures which aim to consolidate secondary education so that it leads to professional qualifications through support for vocational education, and also those which, by diversifying the curriculum of primary education or instituting a post-primary year, have as their objective diminishing the risk of school failure and endowing young people with a minimum professional qualification, allowing them to enter working life. In addition to these measures, there are also those which, in the case of this objective, approximate the school context to the business one by promoting courses of instruction. In the case of this objective, the intervention of the ERDF is anticipated for the purpose of equipping secondary and higher schools with infrastructures and providing them with supplies, and that of the ESF, essentially through support for courses at professional schools and courses of instruction at technological and university education level. For Objective 3 measures, there are measures which aim mainly at diversification and the innovation of educational supply in schools, in order to “open it up” to new target segments of the public and other age strata. What is essentially involved is to serve active young people and adults who will be able to go to school again to follow short training in various areas and, in parallel with this, to see knowledge acquired outside the educational system certified by the schools. On the other hand, as far as university students are concerned, educational offers will be put forward for professional specialisation/updating related to the development needs of certain sectors. Finally, Objective 4 will have measures dedicated to it relating to the training of teachers, inasmuch as this is a strategic instrument for change in the medium term of the role of the school and of the development of the respective profile for “people who are guides and catalysts” of the willingness to learn and acquire new knowledge, with the ESF being required to intervene through the training of teachers. This change in behaviour is closely associated with the dissemination of information technologies and the concomitant provision of schools with computer equipment, a measure which is directly related to the investments to be made in this sphere by the ERDF. 2. STRATEGY Under the Education programme, the strategy defined for the pursuit of the objectives referred to above is based on the following principles: • Complementarity between Community resources and national resources, reflected in a

separation of the respective spheres of intervention. In other words, Community funds are required to intervene on a priority basis in relatively exclusive areas or those involving clear innovation. This complementarity on a priority basis hinders the dispersion of Community sums in spheres regarded as priorities for national intervention, as in the case of higher education, thereby restricting the resources of the Structural Funds to the educational sub-systems (professional schools) or to spheres (continuing education of teachers) for the establishment of which their participation was of fundamental importance. This option will be reflected in greater visibility and the possibility of impact assessment, in compliance with Community Regulations;

• Interlinking with other operational programmes, whose action has a direct impact or which call

for a substantial inter-sectoral contribution, in particular the Employment, Training and Social Development, Economy, Science, Technology and Research and Information Society programmes;

• Concentration of resources in the measures intended for the 15-18 age group, with a view to

accelerating convergence with the EU countries at the level of rates of scholastic education and the diversity of the available educational/professional methods;

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• Establishment of a decentralised component under Priority 4, for certain measures, with an option of immediate decentralisation in the case of investments in certain education infrastructures financed by the ERDF and a cautious and gradual decentralisation in the case of ESF measures, in relation to which, regardless of management closer to the field being considered useful (as in the case of support for the courses of professional schools), the necessary mechanisms need to be safeguarded so that this same management is conducted under the best conditions of effectiveness and efficiency;

• Establishment of an information system to support the decentralised management of the ESF,

through recourse to existing instruments of support and assessment at national level or to be established at regional level (e.g. the Regional Observatory of the Progress of Professional Education Pupils) so as to make decisions possible on the financing and selection of applications and, in particular, the observance of the selection criteria in respect of the courses which will be financed by the national programme and by regional programmes;

• Conducting a monitoring and evaluation policy, in partnership with the Commission

departments, having the gauging of the efficiency of the instruments used as a constant concern so as to boost the investments made and maximise their impact and, where applicable, reorientate investments. This aspect is crucial if, on the one hand, we were to take into account the fragile aspects seen during CSF II on this subject, and, on the other, we considered the next programming period to be sufficiently long (7 years), with the development recorded, whether at educational sector level or in other spheres, being able to make certain readjustments obligatory.

3. PRIORITIES In accordance with the objectives selected and the strategy delineated, the measures of the Education programme are reflected in the following priorities: • Initial training of young people

This priority covers those whose objective is to provide young people with qualifying vocational training prior to entering working life and, at the same time, reduce the rate of early school-leaving by, among other means, diversifying primary education, establishing a qualifying post-primary year and, for the most part, as support for professional education, the supplementary educational supply of regular and technological education likely to endow young people not intending to continue with their studies, at least in the immediate future, with a relevant qualification for the purposes of the labour market;

• Continuing and advanced training of educational professionals This priority covers those measures relating to the training of teachers and other staff; their primary objective consists of promoting the quality of education and responding rapidly to the challenges posed by the information society to the profile of teachers. This measure will allow teachers to update knowledge and specialisation and also enable scholarships to be awarded for their advanced training.

• Promotion of the employability of the active population This priority covers those measures which aim to give young people the possibility of following courses of instruction in undertakings, facilitating their entry into the labour market and also measures whose objective is to stimulate lifelong learning, in a school context. This means that schools should be able to offer short training to people in employment which is distinct from

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that available in the training system, which allows them to acquire knowledge in the spheres of technological literacy and foreign languages and enables them to adapt better to the needs felt in the professional world. In this connection, post-secondary courses will furthermore be created. Moreover, a process for the certification of the knowledge and skills acquired on a lifelong basis will be established.

• Support for infrastructures This priority covers those measures aiming to build school buildings, canteens and accommodation, the relevant supply and, above all, support for the purchase of computer equipment and its link to the Internet with a view to accelerating the development of the information society.

B.2 – EMPLOYMENT, TRAINING AND SOCIAL DEVELOPMENT 1. OBJECTIVES The CSF priority to improve skills among the Portuguese and promote employment and socio-economic cohesion has one of its main operational instruments in the employment, training and social development measure, with a close interlinking with educational, economic and regional measures. In relation to the latter, there is particular complementarity with the decentralised measures, especially in the context of the qualification and occupational integration of the unemployed. Pursuant to the European strategy for employment and following the provisions of the national action plan for employment, the following objectives may be defined as fundamental: - the promotion of a suitable transition of young people to working life, endowing them with

high levels of employability. This effort will have to be complemented by measures in the area of education, allowing early school-leaving to be effectively combatted and will have to be orientated towards the acquisition of basic occupational skills which make solid and permanent integration in the labour market possible;

- the improvement of the basic occupational qualification of the active population. The high

level of existing employment in Portugal combined with the deficit - already referred to - of skills among the active population means that the need for continuing education among workers so that they maintain satisfactory levels of employability, is becoming pressing. The qualification of public administration officials and agents aiming to improve their professional performance, as an essential condition for modernising public services, is included;

- preventive management and support for sectoral restructuring processes through the

continuing education of workers referred to and the development of the aptitudes of entrepreneurs so that undertakings can cope effectively with any processes of change;

- the socio-occupational integration of groups with particular difficulties in access to the

labour market, aiming at, on the one hand, the improvement of the living conditions of populations with greater vulnerability by revitalising the social fabric and promoting integrated local development and, on the other, boosting the employability of these groups and promoting their social and occupational integration.

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2. STRATEGY The strategy drawn up to pursue the objectives referred to is based on the following lines: - the existence of closer inter-departmental links to face the challenge of employability and

adaptability, both at the level of the different sectoral governmental areas (economy, health, environment, public administration) and of the establishment of efficient links with bodies which are territorially responsible for regionally decentralised measures;

- the development of suitable instruments to boost undertakings - fundamentally micro- and

small undertakings - as qualifying organisations, promoting the integral training of entrepreneurs, executives and workers at the workplace and guaranteeing a rise in competitiveness;

- focusing efforts on areas with the potential to create employment in close cooperation with

measures in the economic field and pursuing a policy of de-investment in sectors in which a poorly qualified labour force is intensively used;

- the modernisation of public administration by raising the average level of qualification of

employees and public agents, making a suitable contribution from them possible towards the efficient pursuit of public policies and the increase in productivity of the economy, in particular through training in information and communication technologies;

- the consolidation of the public services of employment and training, making the most of its

mobilising nature in the pursuit of the public policies of employment and training, namely in the implementation of the guidelines for employment, as regards early action in response to unemployment problems;

- the development of a dual approach towards combatting social exclusion: on the one hand,

fostering a set of initiatives upstream of employment which are aimed at social development on a local basis, with a view to promoting Community development and the social inclusion of disadvantaged groups; and, on the other, supporting measures specifically relating to promoting the employability of groups with particular difficulties in access to the labour market, while stimulating occupational integration mechanisms.

3. PRIORITIES Taking into consideration the objectives and strategy referred to, the Employment, Training and Social Development programme will develop around the following priorities: To promote qualifying training and transition to working life Action to prevent unemployment takes the form of efforts to facilitate a suitable transition to working life for young people, endowing them with high levels of employability through training facilities associated with work contexts and adapted to ongoing changes. These measures supplement the measures carried out by way of action for education and will have to allow early school-leaving to be effectively combatted, since a large number of young people are still trying to be integrated in working life without completing compulsory schooling. The resources will be concentrated in initiatives able to provide young people with training certified by schools and professionally, in particular through the apprenticeship system, in which it is anticipated there will be, under the commitments already undertaken through the national action plan for employment, a doubling of the number of participants between 1998 and 2002. Other training courses will additionally be offered which confer school and professional certification

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simultaneously, like tourism school courses and socio-occupational training courses, or those specially geared to the acquisition of the technical skills needed to work in a profession or for occupational integration by the students (sandwich courses and technological specialisation courses). The different types of training will have to include, in adapted form, modules which make make trainees aware of environmental protection. Flexible instruments of training intended to improve the skills of young people, especially those with low levels of scholastic competence or major problems in terms of employability, are further included. To develop lifelong training and the adaptability of workers and undertakings The system of vocational training in the context of growing competition between undertakings requires the future needs of the Portuguese economy to be anticipated. This need for restructuring demands that the training of employed workers, with a view to improving their qualifications and employability, should be based on a strategy of greater participation and increased assumption of responsibility on the part of undertakings. The main instrument will be continuing education, through stimulating training for qualification and professional rehabilitation as well as the training of executives and directors of undertakings, thereby contributing decisively towards achieving the objective, in 2002, of the national action plan for employment of 10% of active persons undergoing training. Moreover, promotion of the employability of employed active persons will include the improvement of the potential of workers in the health sector, which is a strategic area for the policy of social cohesion, in a way closely linked with the measures to be implemented through action in relation to health. The training measures to be stepped up, which include training on the initiative of the worker himself, will be based on systematic, flexible and preferably modular models associated with a skills accreditation which is recognised for the purpose of obtaining a qualification. The response to concrete situations of organisational development arising from the introduction of new technologies may involve recourse to training procedures on a measure by measure basis. The specific needs of SMUs following pilot programmes carried out under the previous Community Support Framework require the implementation of training/advisory measures for SMUs which are supported in flexible models adapted to the needs and objectives of undertakings and their workers. These action procedures include consultation in the fields of management, the training of executives and managers in areas for the support of business development and suitable awareness, and environmental training, modules. To train and modernise public administration The training of public administration officials and agents is a central aspect of the process of administrative modernisation and is fundamental in the pursuit of the CSF objectives in general. The effort, already carried out in CSF II, of training all those performing their functions in public administration, will be continued, although the innovative nature of training projects will be given greater attention, with training being provided on demand and special efforts being concentrated in training directors and executives, especially in modern management techniques. The action to be taken in this sphere will be performed with recourse to different training procedures and be based on a diversified spectrum of measures, namely technical information measures and refresher courses, further training, retraining, specialisation and professional rehabilitation.

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The training measures to be implemented in central government as part of this intervention will have to be specially interlinked with the local government training measures provided for in the regional programmes with a view to action being consistent and benefiting from economies. Close collaboration will have to be established with the measures to modernise public administration under the information society programme. Training is a key aspect of the process of modernising public administration and providing it with telematic capacity, so that training in information technologies and communication must be considered a priority. To develop support services for employment and training To promote employment and training policies, continuous sustained support is needed for the units and services to support their operation and the training of their agents. With this in view, the installation and modernisation of employment and vocational training centres will be supported through the establishment, acquisition or adaptation of the respective infrastructures and also the acquisition of the equipment needed for their proper operation. In the services area, the fundamental lines of action will have to be centred on professional information systems, on studies making the knowledge of situations objective, on units to support occupational integration and on the network of knowledge resource centres. The effort of initial and continuing training of employment policy officials and in particular the training of careers advisers, employment specialists, trainers, training promoters and training specialists, will have to be pursued and consolidated. To promote equal opportunities for men and women The promotion of equal opportunities is adopted as a strategic dimension of the CSF. In addition to this common dimension, specific measures of the programme aim to improve access and the participation of women in the labour market, in particular in terms of career prospects, access to new opportunities of employment and entrepreneurial spirit and the reduction in vertical and horizontal segregations on the labour market based on gender. The measures to be implemented will be centred on promoting a change in outlook and the sharing of the decision-making process, on support for reconciliation between professional and family life, on the development of an entrepreneurial spirit among women and on improving social dialogue and the participation of civil society. To promote social development The measure implemented in this Priority is an attempt to respond to the specific needs of particular social groups in access to the labour market through a multiple and integrated approach. On the one hand, it is intended to operate upstream of the specific factors of the labour market, with a view to promoting integrated local development by stimulating the processes of socio-community development. On the other, it seeks to stimulate and promote the employability of specific groups, such as the disabled, whether through measures for occupational rehabilitation or at the level of measures supplementing the process of occupational integration.

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The promotion of the socio-occupational integration of groups with particular problems of access to the labour market is a priority of this intervention action, which is reflected in concrete form by measures specifically directed at the characteristics of the segments of the public to be covered and which normally require profound individual support work through, in particular, support, guidance, training and pre-training measures. An approach which seeks to promote occupational integration processes which contribute towards raising levels of employability and are carried out in connection with the social employment market will also have to be developed. B. 3 – SCIENCE, TECHNOLOGY AND INNOVATION 1. INTEGRATION In the period 1994-1999, the scientific and technological policy followed in Portugal was characterised by the importance assigned to institutional organisation, the development of the scientific and technological system and the drawing up of basic rules and the instruments of action of the innovation system with a view to the modernisation of economic activity and the global increase in national skills. The measures financed by the Structural Funds under the PRAXIS XXI programme were part of this objective and accorded priority to the aspect of financing research projects selected through public competitions, on whose selection panels international experts, chosen on the basis of their skills and independence, were obliged to sit. An attempt was thus being made to rectify the known pernicious effects of peer reviews in countries or regions with small scientific communities, with a view to ensuring the overall quality of selected projects. Particular attention was thus paid to the financing of joint research, bringing together undertakings and groups of researchers in projects of common interest. At the same time, a major effort was made in relation to human resources, as more than 9 000 scholarships had been awarded (mainly for doctorates and post-doctorates), which is a significant enough number in the national context and far higher than that provided for initially (4 200). It was still possible to promote scientific culture through the support granted for measures under the “Living Science” programme and, through the technical assistance measures of PRAXIS XXI, to launch the foundations of the financing of the Science and Technology Observatory. From the point of view of the regional equilibrium of the projects supported, the initial objective of limiting the total aids to be granted in Lisbon and Oporto to 50% was achieved. However, accompanying the general population trends and the spatial distribution of economic activities, Portuguese research is still mostly concentrated in the two major cities of the country and, to a lesser degree, in Coimbra, given its century-old university tradition. On the other hand, the reduced expenditure on research conducted by undertakings, especially when compared with that disbursed in developed economies, continues to be a cause for concern, because, apparently, in addition to the direct effects on the innovation capacity of undertakings, those activities provide them with an increased absorption capacity which allows them to benefit from opportunities which have arisen outside, thereby contributing significantly to the increase in their competitiveness. This situation bears out the need to consolidate the support directed at boosting participation by the production sector in the scientific and technological system through, in particular, the joint research projects already referred to and aids to the mobility of researchers, and to promote demand for technological services from undertakings and the strengthening of the links between the scientific system and the economic system. Portuguese scientific policy is aimed at establishing an integrated system at national level which identifies existing capacities and promotes new activities in the different regions, thereby ensuring that the greatest territorial imbalances are rectified. However, and because the progress made at

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scientific and technological system level is not always reflected in direct and immediate benefits for the regional economies, this strategy must be supplemented by measures developed under regional strategies for innovation which allow that link to be promoted and the participation of regional and local players to be ensured. This type of action can be developed through measures which bind regions and central government, allowing the mobilisation of human resources and external equipment to ensure the overall efficiency of the measure. 2. OBJECTIVES AND ACTION STRATEGY The main strategic lines which underpin the framework of action through the Structural Funds in the period covered by the third CSF are as follows: • To remedy the scientific backwardness of the country through, in particular, training and

qualification measures, support for internationally competitive scientific production and the mobilisation of capacity for international cooperation, the establishment of a modern network of scientific and technological institutions and the institutional development of the national scientific and technological system.

• Expand innovation by the consolidation of cooperation between scientific and technological

undertakings and institutions, by the internationalisation of technological research, by maximising the results of research and by developing integrated inter-sectoral programmes.

• To promote scientific and technological culture, stimulating experimental learning and

promoting the dissemination of science and technology. At the same time, special importance is attached to the aspects of diagnosis, planning, support and assessment of policies and measures using, in particular, the resources of the Science and Technology Observatory. Under these conditions, the main measures supported by the Science, Technology and Innovation programme are organised around the following priorities: • Training and qualification of human resources

Human resources constitute the essential dimension of the activities of research and development. Their suitable training and qualification are an indispensable condition for remedying scientific backwardness.

Regarding the system of scholarships, efforts for the advanced training of human resources with a view to creating skills and qualifications in the fields of science and technology are continuing. Parallel with the allocation of scholarships for doctorates and research studies to be carried out in the country or abroad, it is also important to accord priority to the continuing training of researchers, in particular through support for post-doctorate studies.

On the other hand, developing a market for scientific employment by means of the occupational integration of highly qualified human resources in undertakings, will have to be intensified in order to improve the effort of skills training. Indeed, the necessary interlinking between the activities of research and development and the competitiveness of the economic system can be ensured, in part, through scientific employment, with support for the integration of researchers in undertakings thus assuming particular importance. The establishment of a special R & D programme for educational telematics and the development of applications of sciences and information technologies will also be important.

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• Reinforcement of participation by the production sector in the scientific and technological system What are especially involved here are supporting measures geared towards stimulating demand for technological services for from undertakings through, in particular, a programme of technological audits, technological training, advice and intermediation measures and measures for the demonstration and diffusion of suitable practices. The collaboration between scientific and technological institutions and undertakings is also growing, with special importance being attached to joint research measures and the establishment of facilities to foster new undertakings at scientific and higher education institutions, directed mainly at young researchers. The mobility of qualified human resources between universities and undertakings is encouraged, in particular by support for the engagement of doctors and masters by undertakings

• Promotion of innovation and technology transfers An endeavour is being made to support the acquisition of technology by the business sector through mechanisms that allow, in particular, the processes of technology transfer to be facilitated and innovation to be stimulated (through, for example, financial support for the acquisition of technology and the purchase of patents, of measures to promote and publicise existing opportunities, of improvements to the information networks and support for the link to European and international computer networks). In the particular case of support for innovation, this will be pursued via an integrated approach which takes into account the measures provided for under the programme for the Economy and, in particular, the general system of incentives provided for in this measure, which will, as far as possible, have to adopt innovation as the criterion of priority selection.

• Internationalisation of the scientific and technological system and the innovation system The operational programmes of CSF I and II, the Community Initiative STRIDE and EU research framework programmes gave a major boost to the internationalisation of the scientific system. The technological system must, in turn, extend outwards via measures which strengthen the links between innovation policies and internationalisation strategies of undertakings and the interlinking between national and foreign undertakings, universities and research centres. In particular, the opportunities opened up for participation by researchers and national undertakings in international programmes of fundamental importance must be employed to advantage (framework research programme of the European Union, EUREKA programme). Along the same lines, the focus is still on measures to support internationally competitive scientific production.

• Development of a cohesive network of research institutions

The integration of national scientific and technological institutions in a modern and cohesive network which is regionally balanced, closely linked to the economic system and integrated in similar European networks, concludes the efforts made to date as regards infrastructures of the research and development system and for the consolidation of the operation of the institutions in question. As regards the construction of new infrastructures, a cautious attitude must adopted, in particular, with the financing of the operational costs of the new institutions being guaranteed. In any event, the adaptation of existing infrastructures for the purpose of using them as a matrix of equipment in joint use is given priority.

At the same time, the systematic promotion of scientific and technological culture is being pursued through the generalisation of scientific education with a stimulus for experimental apprenticeships

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(“Living Science in Schools” network, annual competitions for projects to be developed in primary and secondary education schools) and of measures for broadcasting technological infomation (“How things are made” and “Science for All” networks).

B.4 – INFORMATION SOCIETY 1. GENERAL ASPECTS The objective of promoting a knowledge and information society in Portugal transversally involves the whole of Portuguese society and constitutes one of the first priorities of action under the Structural Funds in the period 2000-2006, clearly adopted by the present CSF. The main role in the establishment and development of the information society belongs to the private sector: it is from economic agents, and undertakings in particular, that the fundamental impulse from which progress in modern communication and information technologies derives is expected. Their action must, however, be supported by a public strategy which contributes towards accelerating that development and is orientated towards minimising the risks of exclusion of the most disadvantaged strata of the population, from both the social and territorial point of view. This public measure will have to act to stimulate demand for, or the supply of, services and knowledge. In the case of the former, by formulating demand for innovative services in the traditional skills of public intervention (in the reform of public administration, in health, in environment, in support for the disabled and elderly, in transport, in culture, etc.), accelerating the diffusion in undertakings of the information and communication technologies (ICTs) linked to systems of flexible production, to e-commerce, teleworking, telemedicine and methods of managing information and knowledge, improving the qualification of workers to deal with the TICs, adopting a referential of basic skills, constructing a network of open centres of learning with multimedia and distance technologies and stimulating, in undertakings, continuous training and the adoption of qualifying bodies, providing guidance for educational and professional support to stimulate the adoption of all the new requirements of the information society, with particular attention being paid to categories at greatest risk of social exclusion (the elderly, disabled, ethnic minorities, illiterate, etc.). On the knowledge supply side, the networks for R & D production will have to be strengthened, with cooperation and coordination between national programmes and of international scientific cooperation programmes and scientific organisations being stepped up. Knowledge industries will have to be supported, in particular through the adoption of measures promoting digitalisation and accessibility to all information of public interest and to its being made available with a view to producing added value and developing software tools for communication and the production of knowledge. Public intervention in the institutional sphere will have to be developed in precise areas through, for example, participation in international structures in which are defined the major regulatory and strategic governing factors of the information society; the establishment of legislative, regulatory and administrative systems favourable to the electronic trade; and the practice of positive examples, as regards simplification and the elimination of bureaucracy in public administration plus the improvement of its efficiency, in particular through the use of new technologies which facilitate contact with citizens. Generally, it is the responsibility of the State to guarantee free access and the exchange of information, granting equal opportunity for participation to all citizens, regardless of their economic and social potential, and ensuring that the new technologies are not changed into an additional factor of social fragmentation. At the same time, it is its responsibility to guarantee the protection of privacy and the protection of the rights of citizens and organisations through suitable regulations.

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2. OBJECTIVES AND INTERVENTION STRATEGY In this context, and still bearing in mind the European Commission Guidelines formulated in its report “Employment strategy in the information society” and those contained in the “Green Paper for the Information Society” prepared by the Member State, a set of measures to be supported by the Structural Funds organised around two essential aspects is defined:

I. A basic programme containing measures to stimulate new services and innovative applications, both in terms of economic benefits (commercial organisations, especially SMUs) and social benefits (at society and individual level) which will constitute the operational programme for the “Information Society.”

II. A set of specific measures as part of the sectoral and regional operational programmes,

which will ensure, in the sectors or regions considered and in the way most appropriate to their particular characteristics, the development of skills linked to the evolution of the information society.

This mode of operation, at two levels, demands a system of efficient interlinking and a precise definition of the responsibilities of the various departments involved. Thus drawing up the overall strategy for public intervention is the remit of the basic programme. These skills will also have to be manifested in the negotiation phase of the sectoral programmes. Later, and in addition to a function of coordination of all the measures pursued in this sphere, that basic programme must ensure the maximisation of the impact achieved in the different sectors through suitable planning of the measures and consideration of the impact of interdependence and complementarity. In this connection, the basic programme for the “Information Society” will be structured around the following four spheres of action. • To develop skills and knowledge

The overall aim is to teach and certify skills in information sciences and technologies and promote especially: − the launching of a process of training and certification of skills in information technologies

at various levels for professional purposes; − the granting of scholarships to achieve a specialisation, master’s degree or doctorate and

produce specialist or post-doctorate studies; − the establishment of a national institution for advanced training and certification (Telematics

University) in different areas of knowledge and R & D, linking undertakings and educational institutions;

− the development of a research, development and demonstration programme in the field of

the computational treatment of the Portuguese language. • To promote the dissemination of information and communication technologies and

combat exclusion in the computer field

One of the objectives laid down in the context of this field of action is making the use of computers and the Internet universal; such promotion of use on a wide scales is accepted as a decisive factor in combatting exclusion in the computer field. The aim is mainly to stimulate

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demand and the participation of the greatest number of citizens in using the new information and communication technologies. The main measures to be developed in this context are: − the inclusion of a certification system with a discipline in basic skills in information

technologies in compulsory schooling courses; − fostering widespread use of the “Science, Technology and Society Network” to all (about 8

000) primary schools and cultural and scientific associations free of charge to the users; − the establishment of a programme called “All in the Network”, providing for free e-mail

systems for the Portuguese population and a webspace network available to the public and partly free of charge in the 4 241 civil parishes in the country;

− the development of advanced services for the use of high flow rate networks and their

interconnection, and the making available of a high flow rate network for scientific and educational purposes.

These measures will be supplemented by others, for which exclusively national financing is provided and they are intended to increase the number of Internet users; prominent among these are the stimulus to supply products suited to the family market, coupled with a system of tax deductions, applicable in connection with the tax on the income of single persons (IRS), for the acquisition of computers, terminal equipment and software for home use.

• To modernise public administration

The process of modernising public administration and equipping it with data communications facilities and of devising new forms of access by citizens and undertakings to public information is becoming of decisive importance in the generalised spread of the information society. In practice, however, public administration has not managed to perform this function, so that it is necessary to identify factors of resistance to change and also provide for measures intended to transform it into a central priority of the knowledge-based and information society. It will also be important to develop studies and devise practical solutions which demonstrate the viability of new procedures and forms of action.

In addition to enhancing the quality of life of citizens, the modernisation of public administration will result in a major advance in the quality of economic development, since it contributes towards reducing external losses in savings, this being of marked importance in the Portuguese production system. It is clearly apparent, in this context, that efficiency and the transparency of services need to be improved through, for example, their restructuring and the optimisation of their resources; the establishment of intranets involving services with significant links, albeit under different ministries, allowing the elimination of difficulties in communication between departments and public bodies; the setting of yearly goals for the improvement of services to users; the introduction of the principles of the “single gateway” and “first in, first out” as regards relations with citizens, while still ensuring the computerisation of applications and requests to the government; and the exploitation of new potential, such as working in groups, real-time sources of information and databases capable of generating generalised and personalised information.

The nature of these measures means that the information society programme and similar measures for modernising public administration, carried out in the context of other programmes, need to work closely together. The intervention of the basic programme can, in this context, assume two aspects according to options to be defined case by case in accordance with the specific dynamics demonstrated for each service: support for the initiatives proposed by the

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different government services or giving rise to modernisation measures in the case of other services and departments.

• Digital towns programme

On account of its specific characteristics, in particular in terms of intensity and complexity of information, the organisation of life in towns requires special treatment which sets great store on proximity as a factor in competitiveness. What are involved are initiatives which aim to reflect in concrete form the facilities offered by the information society with a view to improving the quality of life of citizens and the competitiveness of undertakings. The aim is to integrate public services (autarchies, social security, finance, health centres, etc.), local associations (cultural, sports or others), schools and undertakings in a digital network accessible to the common citizen. These projects entail global involvement by local society, by galvanising regional partnerships to respond to the challenges of the information society in an innovative and non-localised way, so as to guarantee participation and generalised accessibility on the part of citizens and undertakings in specific projects.

The programme promotes the use of information and communication technologies by citizens, schools, undertakings and public services, lessening distances and increasing accessibility to information and new services. Organised on the basis of a dynamising nucleus established on a joint basis and in association with local agents and bodies which facilitate applications in respect of projects in different areas, it is directed at different targets (schools offering various degrees of education, libraries, archives, spare-time workshops, spaces for public events). It is developed through measures which stimulate the generalised use of telematic media and in particular makes available cultural and museum information and municipal information useful to citizens and undertakings, it fosters the use of e-commerce and promotes the utilisation of the benefits of telemedicine and the remote provision of medical services.

Measures for training people involved in the development of digital towns projects are also provided for.

In addition to the four vectors of action set out, the basic programme will also have to provide for integration measures, among which the following are prominent:

− dynamising, developing and testing pilot projects and measures which prepare, at an experimental stage, the conditions for the development of measures which will later be carried out at the level of each sectoral or regional programme;

− monitoring developments so as to guarantee the quality of the collective measures to be

implemented in the sphere of the information society; − creating efficient mechanisms for the evaluation and monitoring of projects and political

measures and also for the creation of knowledge concerning the development of the information society.

B.5 - HEALTH 1. GENERAL ASPECTS In the last decade, Portugal has made substantial progress in terms of the health of the population, although the demand for health services has gone up significantly. This situation was mainly due to

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the increase in the levels of income of the population and to the significant investment in equipment and infrastructures during the time CSFs I and II were operational. However, and without prejudice to this recorded development, two of the indicators most widely used and representative of the situation in the sector (rate of general and infant mortality and life expectancy) show values below the average in the EU and reflect the marked regional disparities recorded in the country. The State must have a central role in the provision of health services. Now in Portugal, although the proportion of expenditure on health in the GDP was 8.2% in 1997, the public component of health financing was low when compared with that of other European countries. On the other hand, private expenditure since the beginning of the 1990s has exceeded the Community average: 3.3% of the GDP in Portugal as against 1.9% in the EU in 1997. In turn, in the same year, per capita expenditure on health was 1 071 gpc by comparison with 1 738 gpc in the EU, but per capita expenditure on medicines was higher (282 gpc and 270 gpc, respectively). 2. OBJECTIVES AND INTERVENTION STRATEGY Given that health measures may lead to the aggravation of regional disparities and bearing in mind that, notwithstanding the increase in public investments in this sphere, demand for health services still cannot be regarded as satisfied in terms of the amount and quality of the services provided, a thorough reform of the National Health System which must, moreover, be supplemented in the five regions of continental Portugal by decentralised measures attuned to specific local features and characteristics, was decided on at national level. Thus, bearing in mind the diagnosis of the sector and the strategic guidelines of the reform in progress, and with the measures of the third CSF as a mainstay of this reform, the overall objectives of the Health operational programme are: • to make advances in health; • to ensure all citizens have access to quality health care. The pursuit of the objectives referred to will be developed through the following strategic lines of action:

• Τhe first is orientated towards preventing the most critical diseases, the promotion of healthier lifestyles and the protection of particularly vulnerable groups. In this context, the aim is to develop the interlinking of the Portuguese information system and similar systems in the countries of the EU, produce statistical information, investigations and indicators which allow the health situation in Portugal to be monitored, carry out epidemiological studies and develop a systematic knowledge of the quality and safety of the goods and services on the market, strengthening in particular the role of the National Health Observatory. As regards the development of the National Public Health Network, priority will be given to the establishment of Regional Public Health Centres and to the accreditation of laboratories with a view to the control of environmental risks. The priority areas defined for action under the Health programme are those in relation to which a negative development (oncology, nephrology, traumatology, cerebral vascular accidents, AIDS, tuberculosis, diabetes, drug dependency and alcoholism) is seen, so that strategic action, either as regards tracing and early diagnosis systems or at the treatment stage,

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is justified. Particular attention is being paid to the establishment of special mechanisms for populations in a situation of social exclusion and the promotion of blood donation.

• Τhe second strategic line is reflected in improvement in the quality of health care.

It is generally agreed that fundamental improvements in the use of the existing resources, and in the management and organisation of the various health institutions (hospitals and health centres) need to be introduced. The State must in particular be responsible for quality control and efficiency of the services and the financial rationality of the system. In this connection, systems and practices in relation to quality, qualification and the development of human resources will be introduced. A Hospital Reference Network will also be implemented for areas of priority specialisation based on an integrated system of inter-institutional information which will be organised in accordance with existing capacity and the specificity and skills of each hospital, both at out-patient and in-patient services level. The planned investment aims to renew the installations and equipment integrated in the various networks and promote the computerisation and inter-comunicability of the system, allowing a wider circulation of information and the utilisation of new technologies for the provision of better and more rapid services to the user (although exclusively through the optimum use of existing capacity). A further, supplementary, aim is the promotion of specific training, measures directly linked to projects for the modernisation of services, the production of teaching resources and support for the system for the certification and accreditation of teaching units in the field of health. It is additionally intended to ensure the treatment and elimination of hospital waste, involving the use of investments essentially covered by the Plan for the Treatment of Hospital Solid Waste, in particular the overhaul of a number of incinerators and ancillary equipment.

• The third guideline aims to promote new partnerships with the private and social sectors in

areas or zones where such sectors are especially called on to provide quality health care (particularly therapeutical communities for drug dependency, primary care and home, diagnostic and therapeutic care). With this objective, a system of incentives will be set up for business projects in the areas of health and support for non-profit bodies in the social sector.

The strategy for action in the health sector additionally provides, for the Health operational programme, for decentralised measures included in the regional programmes and relating to the establishment of the local health systems. These systems are a very important aspect of health policy and, in general terms, it may be said that, to guarantee access to health on the part of all citizens it will be necessary to evolve from the current “hospital culture” to an integrated vision, namely among health centres and hospitals. This change entails, in addition to any consolidation of the equipment of health centres, an increase in the number of speciality consultations and support for placing doctors in health centres. It is also essential that a suitable link be established with the other sectoral operational programmes, in particular the “Employment, Training and Social Development” programmes as regards the qualification of human resources, the “information society” programme for the aspects linked to the new technologies of telemedicine and others which prove to be relevant.

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B.6 – CULTURE Culture cuts across sectors of economic activity in general and constitutes a common denominator of sectoral and regional policies, so that the global action of the State and the Structural Funds in this sphere is far more extensive than that covered in the Culture operational measure. Hence this programme only covers the essential and autonomous aspects of cultural policy, incorporatng major measures of national and strategic interest. In this context, the following constitute essential objectives of the Culture Operational Programme: • To strengthen culture as an employment and development factor • To promote greater spatial equilibrium in access to culture The strategy established for the Culture Operational Programme involves pursuing the objectives outlined, allowing two priority fields of action to be chosen: • To make the most of historical and cultural heritage

This sphere includes, on the one hand, the recovery and effective utilisation of property classified as historical heritage and may include work on buildings and on the construction or adaptation of additional facilities for the benefit of visitors, of surrounding infrastructures and external repairs. On the other hand, it covers the implementation of innovative cultural activities which contribute towards revitalising restored heritage and for the creation of employment. Priority will be given to measures on premises which, by possessing a valuable historical and cultural heritage, are likely to boost significant tourist flows and contribute, through the development of cultural and social activities, towards the economic consolidation of regions and to the cultural, social and educational enhancement of communities.

It additionally covers the restructuring of the main national museums, including the restoration of the buildings and moveable heritage which forms part of their assets, the adaptation of areas for public use and additional amenities for visitors, surrounding infrastructures and external repairs, as well as complementary measures likely to contribute towards transforming museums into tourist attractions.

• To foster access to cultural assets

This sphere includes, firstly, the improvement of the conditions of supply of areas suitable for cultural activities, with a view to establishing a balanced national network through the construction, adaptation and equipping of cultural sites. Along the same lines, measures will be financed for the promotion of cultural activities in connection with the performing arts which contribute to the establishment and support of areas of this kind in the start-up stage, to the appearance of culture officers and associated posts and to the creation of new segments of the public and cultural consumer habits of communities – with the overall objective of lessening existing disparities between the different regions of the country. Indeed, no balanced network of cultural amenities exists, by and large, in the country which is capable of hosting dance, music and theatrical productions by artistic groups nationally agreeing to perform on tour within Portugal. It is therefore important that at least the main urban centres inland should have halls of a size, and with the equipment and technical characteristics suitable, for this purpose.

Secondly, the aim is to integrate public initiatives which contribute towards disseminating cultural information via the use of new information technologies or towards helping to bring culture to the individual and to society. Priority measures related to the conservation and

66

dissemination of cultural heritage, which are the responsibility of public bodies, are being carried out, such as the constitution and dissemination of inventories of fixed or moveable assets and collections of historical archives or libraries.

Particular attention is being paid to the possibilities opened up by the Internet and other digital vehicles. For this reason, this sphere will pay special attention to the digitisation and computerisation of public cultural collections intended for public dissemination, including, specifically, the following measures:

− a museum computerisation network; − the inventorisation and digitisation of cultural heritage; − the inventorisation and digitisation of archive collections, bibliographical resources and

photographs; − the establishment of digital libraries; − support for the Computerised Public Reading Network (RILP).

On the other hand, the ERDF will be able to contribute towards financing innovative, cultural projects which create employment, including those of private origin, the percentage of which will be established in the Culture Operational Programme.

67

PR

IOR

ITY

1 –

IM

PR

OV

ING

SK

ILLS

AM

ON

G T

HE

PO

RT

UG

UE

SE

, PR

OM

OT

ING

EM

PLO

YM

EN

T A

ND

IM

PR

OV

ING

SK

ILLS

AM

ON

G T

HE

PO

RT

UG

UE

SE

, PR

OM

OT

ING

EM

PLO

YM

EN

T A

ND

IM

PR

OV

ING

SK

ILLS

AM

ON

G T

HE

PO

RT

UG

UE

SE

, PR

OM

OT

ING

EM

PLO

YM

EN

T A

ND

IM

PR

OV

ING

SK

ILLS

AM

ON

G T

HE

PO

RT

UG

UE

SE

, PR

OM

OT

ING

EM

PLO

YM

EN

T A

ND

S

OC

IAL

CO

HE

SIO

NS

OC

IAL

CO

HE

SIO

NS

OC

IAL

CO

HE

SIO

NS

OC

IAL

CO

HE

SIO

N

EDU

CAT

ION

, TR

AIN

ING

, EM

PLO

YMEN

T AN

D S

OC

IAL

DEV

ELO

PMEN

T

Initi

al si

tuat

ion

Obj

ectiv

e 20

06

•

Incr

ease

in

the

actu

al o

r ne

t ra

te o

f se

cond

ary

educ

atio

n in

scho

ol

62.4

% (1

998)

(6)

85%

To

pro

mot

e pr

even

tive

actio

n so

as

to

min

imis

e th

e ris

k of

une

mpl

oym

ent,

in

parti

cula

r by

back

ing

the

qual

ifica

tion

of

new

gen

erat

ions

.

•

Incr

ease

in th

e ra

te o

f atte

ndan

ce a

t edu

catio

n co

urse

s and

initi

al p

ost-s

econ

dary

trai

ning

for y

oung

pe

ople

20

year

s old

28%

(199

8) (

7)

35

%

• T

o in

crea

se

the

perc

enta

ge

of

youn

g pe

ople

an

nual

ly

ente

ring

the

labo

ur

mar

ket,

with

al

tern

ance

trai

ning

faci

litie

s

3% (1

998)

(1)

8%

• T

o in

crea

se t

he p

artic

ipat

ion

of a

ctiv

e pe

rson

s in

tra

inin

g pr

oces

ses

4.

1% (1

997)

(2)

10%

To

pr

omot

e lif

elon

g le

arni

ng

and

impr

ove

the

empl

oyab

ility

of

the

activ

e po

pula

tion

as

a fo

rm

of

prev

entiv

e ac

tion

agai

nst u

nem

ploy

men

t. •

To

incr

ease

the

degr

ee o

f qua

lific

atio

n of

the

activ

e po

pula

tion

(WO

BO

– )

, in

the

rang

e 25

-54

year

s

71.5

% o

f WO

BO

in q

ualif

ied

or h

ighe

r cat

egor

ies (

1997

) (3

)

76%

• C

over

ing

unem

ploy

ed y

oung

peo

ple

and

adul

ts,

with

6

and

12

mon

ths

of

unem

ploy

men

t re

spec

tivel

y, w

ith a

ctiv

e po

licy

mea

sure

s

30%

(199

8) (4

) 10

0%

To

prom

ote

early

ac

tion

as

an

inst

rum

ent f

or th

e pr

even

tion

of th

e ris

ks

of lo

ng-te

rm u

nem

ploy

men

t. •

To

incr

ease

ann

ually

the

perc

enta

ge o

f une

mpl

oyed

w

ho b

enef

it fr

om a

ctiv

e tra

inin

g an

d em

ploy

men

t m

easu

res

18%

(199

8) (4

) 30

%

Sour

ces:

(1) S

tand

ing

inve

stig

atio

n of

em

ploy

men

t. CS

F II

Info

rmat

ion

Syst

em; (

2) E

uros

tat;

(3) M

TS [M

inis

try o

f Lab

our]

/DEP

P [D

APP

- D

epar

tmen

t of A

sses

smen

t, Pr

ospe

ctiv

e St

udie

s and

Pla

nnin

g]; (

4) IE

FP [E

mpl

oym

ent a

nd V

ocat

iona

l Tra

inin

g In

stitu

te];

(5) C

SF II

Info

rmat

ion

Syst

em; (

6)/(7

) M

inis

try o

f Edu

catio

n –

Ann

ual p

ublic

atio

n(s)

of t

he D

APP

68

EDU

CAT

ION

, TR

AIN

ING

, EM

PLO

YMEN

T an

d SO

CIA

L D

EVEL

OPM

ENT

(con

tinue

d)

Initi

al si

tuat

ion

Obj

ectiv

e 20

06

• C

over

ing

of r

egis

tere

d LT

U c

ases

with

per

sona

l em

ploy

men

t pla

n up

to 2

002

5% (1

998)

(4)

100%

• G

row

th in

par

ticip

atio

n by

dis

able

d in

act

ive

polic

y m

easu

res

6

500

disa

bled

/yea

r dis

able

d –

(ave

rage

figu

re 1

994–

1998

) (5

) .

8 10

0 pe

rson

s/ye

ar

• G

row

th o

f su

ppor

t fo

r pr

oces

ses

for

rein

tegr

atio

n dr

ug a

ddic

ts a

nd fo

rmer

dru

g ad

dict

s 30

0 pe

rson

s/ye

ar (a

vera

ge

figur

e 19

94-1

998)

1

400

pers

ons/

year

To p

rom

ote

actio

n fa

cilit

atin

g th

e so

cial

in

tegr

atio

n of

sec

tors

exp

osed

to

long

-te

rm u

nem

ploy

men

t (LT

U)

(bac

king

the

com

bina

tion

soci

al w

elfa

re/re

turn

to th

e la

bour

mar

ket)

To

pr

omot

e th

e so

cio-

occu

patio

nal

inte

grat

ion

of

thos

e pa

rticu

larly

vu

lner

able

to e

xclu

sion

from

the

labo

ur

mar

ket

• R

einf

orce

men

t of

su

ppor

t fo

r pr

oces

ses

of

(re)

inte

grat

ion

– R

ecip

ient

s of

G

uara

ntee

d M

inim

um In

com

e

2 0

00 p

erso

ns/y

ear (

estim

ated

fig

ure

for 1

999)

15

000

per

sons

/yea

r

• S

truct

ure

of q

ualif

icat

ion

of t

he t

each

ing

body

ac

cord

ing

to t

he l

evel

of

skill

s ac

quire

d fo

r an

ed

ucat

ion

with

con

solid

atio

n of

the

com

pone

nts

of

expe

rimen

tal l

earn

ing

20%

(199

8) (8

) 10

0%

To p

rom

ote

scie

ntifi

c an

d te

chno

logi

cal

cultu

re

in

orde

r to

im

prov

e pr

imar

y ed

ucat

ion,

co

ntrib

utin

g to

war

ds

an

activ

e ci

tizen

ship

of

in

itiat

ive

and

resp

onsi

bilit

y •

St

ruct

ure

of q

ualif

icat

ion

of t

he t

each

ing

body

ac

cord

ing

to a

cqui

red,

pro

mot

iona

l lev

el o

f sk

ills

of a

n ed

ucat

ion

for t

he c

itize

nshi

p 3%

(199

8) (8

) 10

0%

Min

imum

no.

of h

rs. o

f tra

inin

g/tra

inee

35

-40

hour

s

69

ED

UC

ATIO

N, T

RAI

NIN

G, E

MPL

OYM

ENT

AND

SO

CIA

L D

EVEL

OPM

ENT

(con

tinue

d)

Initi

al si

tuat

ion

Obj

ectiv

e 20

06

•

To in

crea

se th

e ra

tio o

f com

pute

rs fo

r prim

ary

and

seco

ndar

y ed

ucat

ion

pupi

ls

com

pute

r/pup

ils (1

998)

(7):

2nd

cyc

le to

seco

ndar

y: 1

/35

1st

cyc

le: 1

/150

1 co

mpu

ter p

er 1

0 pr

imar

y an

d se

cond

ary

educ

atio

n pu

pils

To p

rom

ote

the

deve

lopm

ent o

f the

in

form

atio

n an

d kn

owle

dge-

base

d so

ciet

y by

shap

ing

and

certi

fyin

g sk

ills

in in

form

atio

n sc

ienc

es a

nd te

chno

logi

es

and

stim

ulat

ing

rese

arch

•

Ado

ptio

n by

prim

ary

and

seco

ndar

y sc

hool

s of

on

e m

ultim

edia

ed

ucat

iona

l pr

oduc

t pe

r di

scip

line/

year

130

educ

atio

nal s

oftw

are

title

s an

d pr

ojec

ts o

n th

e In

tern

et

awar

ded

and

publ

ishe

d up

to

1999

(7)

250

title

s pub

lishe

d an

d of

ce

rtifie

d qu

ality

•

St

ruct

ure

of q

ualif

icat

ion

of t

he t

each

ing

body

ac

cord

ing

to t

he l

evel

of

know

ledg

e an

d sk

ills

acqu

ired

in t

he s

pher

es o

f th

e in

tegr

atio

n of

new

in

form

atio

n te

ch-n

olog

ies

30

% (1

998)

(8)

10

0%

Sour

ces:

(7

) Sup

porti

ng In

form

atio

n Sy

stem

for t

he m

onito

ring

of th

e 21

st C

entu

ry N

oniu

s Pro

gram

me

(8) M

inis

try o

f Edu

catio

n –

DA

PP a

nd F

OC

O D

atab

ases

70

SC

IEN

CE,

TEC

HN

OLO

GY

AND

INN

OVA

TIO

N

Initi

al si

tuat

ion

Obj

ectiv

e 20

06

•

Expe

nditu

re o

n R

& D

act

iviti

es a

s a p

erce

ntag

e of

th

e G

DP

0.68

% (1

) 1%

•

Αnn

ual n

atio

nal s

cien

tific

pro

duct

ion

inte

rnat

iona

lly re

fere

nced

(SC

I2 ) 2.

798

(2)

≥ 4.

700

To r

emed

y sc

ient

ific

back

war

dnes

s (to

tra

in

and

qual

ify;

prom

ote

inte

rnat

iona

lly

com

petit

ive

scie

ntifi

c pr

oduc

tion;

cre

ate

a m

oder

n R

& D

ne

twor

k;

deve

lop

the

tech

nolo

gica

l in

fras

truct

ure

of t

he c

ount

ry;

mob

ilise

ca

paci

ty f

or in

tern

atio

nal c

oope

ratio

n in

S

& T

). •

Ex

pend

iture

on

R &

D a

ctiv

ities

in u

nder

taki

ngs a

s a

perc

enta

ge o

f the

GD

P 0.

15 %

(1)

0.25

%

To

expa

nd

inno

vatio

n (s

timul

ate

coop

erat

ion

betw

een

unde

rtaki

ngs

and

R

&

D

inst

itutio

ns;

inte

rnat

iona

lise

the

tech

nolo

gica

l in

nova

tion;

max

imis

e th

e re

sults

of t

he sc

ient

ific

rese

arch

; dev

elop

gu

ided

in

ter-

sect

oral

an

d in

tegr

ated

pr

ogra

mm

es)

•

Res

earc

hers

per

‘000

of t

he a

ctiv

e po

pula

tion

(ful

l-tim

e eq

uiva

lent

) 2.

9 %

o (1

) 5

%o

Not

es:

(1)

Sou

rce:

OC

T, IP

CTN

-/97,

199

7.

(2)

Sour

ce: O

CT,

IPC

TN-/9

7, 1

997.

2 Sci

ence

cita

tion

inde

x –

Tran

slato

r.

71

INFO

RM

ATIO

N S

OC

IETY

Initi

al si

tuat

ion

Obj

ectiv

e 20

06

To

shap

e an

d ce

rtify

sk

ills

in

info

rmat

ion

scie

nces

and

tech

nolo

gies

. •

C

over

age

of 9

th y

ear p

upils

with

cer

tific

atio

n in

ba

sic

skill

s in

com

pute

r sci

ence

100%

•

Num

ber o

f sch

ools

link

ed to

the

Inte

rnet

(as a

pe

rcen

tage

of a

ll sc

hool

s)

1

920

(3)

100%

(4)

•

Per

cent

age

of h

ouse

hold

s with

PC

s 14

% (5

) ×

4 (6

)

To p

rom

ote

acce

ssib

ility

and

con

tent

.

•

Num

ber o

f pub

lic si

tes f

or In

tern

et a

cces

s (7

) 4

241

To p

rom

ote

the

use

and

inte

r-co

nnec

tion

of h

igh

flow

-rat

e ne

twor

ks.

•

Num

ber o

f act

ive

sphe

res i

n th

e “T

op le

vel

dom

ain.

PT”

per ‘

000

of th

e po

pula

tion

0.

9 %

o (8

) 5

%o

Not

es:

(3)

Sour

ce: M

CT,

Por

tuga

l in

the

Info

rmat

ion

Soci

ety,

199

9.

Dat

a re

latin

g to

1 7

00 sc

hool

s fro

m th

e 5th

to th

e 12

th y

ear a

nd 2

20 1

st c

ycle

scho

ols l

inke

d at

the

end

of 1

999.

(4

) Th

e ob

ject

ive

is to

link

all

priv

ate

and

publ

ic p

rimar

y an

d se

cond

ary

educ

atio

n sc

hool

s.

(5)

Sour

ce: I

NE,

Fam

ily c

omfo

rt su

rvey

, 199

7.

(6)

The

obje

ctiv

e is

to m

ultip

ly th

e nu

mbe

r of h

ouse

hold

s with

PC

s by

4.

(7

) C

urre

ntly

ther

e ar

e ve

ry fe

w p

ublic

site

s for

Inte

rnet

acc

ess a

nd th

e ob

ject

ive

is to

hav

e at

leas

t one

site

per

civ

il pa

rish

in th

e co

untry

.

(8

) So

urce

: FC

CN

[Nat

iona

l Fou

ndat

ion

for S

cien

tific

Cal

cula

tion]

, 199

9

72

HEA

LTH

1)

Initi

al si

tuat

ion

Obj

ectiv

e 20

06

75.3

2 5

) 76

.72

•

Life

exp

ecta

ncy

at b

irth

2)

a)

Men

b) W

omen

71.7

2 78

.90

73.2

0 80

.17

548

539

514

000

To a

chie

ve g

ains

in h

ealth

.

•

Yea

rs o

f pot

entia

l life

lost

3)

a) M

en

b)

Wom

en

378

708

169

831

359

000

155

000

•

Publ

ic e

xpen

ditu

re o

n he

alth

(ope

ratio

n an

d in

vest

men

t) as

a %

of t

he G

DP

5.6

(6)

6.4

To e

nsur

e al

l ci

tizen

s ha

ve a

cces

s to

qu

ality

hea

lth c

are.

•

Num

ber o

f con

sulta

tions

per

inha

b./y

ear.

4)

3.

4 4.

2

Not

es:

1) T

he in

itial

situ

atio

n re

fers

to 1

998,

with

the

exce

ptio

n of

the

expe

nditu

re in

dica

tor w

hich

is 2

000.

2)

Rep

rese

nts t

he n

umbe

r of y

ears

exp

ecte

d in

the

case

of a

ll th

e in

divi

dual

s of a

pop

ulat

ion

from

birt

h, a

t a g

iven

tim

e (y

ear)

. It

cons

titut

es a

hea

lth in

dica

tor o

f par

ticul

ar in

tere

st

on a

ccou

nt o

f its

com

para

tive

valu

e be

twee

n di

ffer

ent p

erio

ds o

f tim

e or

cou

ntrie

s, be

ing

influ

ence

d by

var

ious

fact

ors,

parti

cula

rly th

e de

velo

pmen

t of h

ealth

car

e.

3) T

his i

ndic

ator

, whi

ch is

em

ploy

ed in

tern

atio

nally

, rel

ates

to li

fe e

xpec

tanc

y an

d m

easu

res t

he p

oten

tial y

ears

of l

ife lo

st be

caus

e of

dea

th, b

eing

an

impo

rtant

ref

eren

ce fo

r as

sess

ing

gain

s in

heal

th.

4)

Thi

s is a

n in

dica

tor w

hich

mak

es it

pos

sibl

e to

ana

lyse

the

effic

ienc

y an

d pr

oduc

tivity

of h

ealth

serv

ices

by

eval

uatin

g th

e us

e m

ade

of a

vaila

ble

hum

an a

nd p

hysi

cal r

esou

rces

. It

cons

titut

es a

sens

itive

indi

cato

r for

und

ersta

ndin

g th

e de

velo

pmen

t of a

cces

s by

the

Por

tugu

ese

popu

latio

n to

hea

lth c

are.

5)

Sou

rce:

INE

6)

Pub

lic E

xpen

ditu

re o

n H

ealth

(ope

ratio

n an

d in

vest

men

t) as

a %

of t

he G

DP

will

hav

e to

be

und

erst

ood

as re

latin

g to

the

wor

ld o

f the

Nat

iona

l Hea

lth S

ervi

ce a

nd h

as a

s its

in

itial

situ

atio

n an

est

imat

e fo

r the

yea

r 200

0.

73

CU

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EXPLANATORY NOTES ON THE INDICATORS EMPLOYMENT, TRAINING, SOCIAL DEVELOPMENT AND EDUCATION

Intermediate Objective 1 “To promote preventive action so as to minimise the risk of unemployment, in particular by backing the qualification of new generations” • Actual or net rate of secondary school education Sources: Education Statistics – Ministry of Education [ME] – Department of Assessment, Prospective Studies and Planning (DAPP) – Annual publication of the DAPP in its capacity as a delegated agency of the National Statistical Institute; Main Education and Training – Main Indicators ME/DAPP - Annual publication whose first edition will appear in 2000. Construction methodology: This indicator expresses the number of young people aged 15-17 in secondary school education or in other educational and initial training institutions on a regular and systematic basis, classifiable as Level 3 in CITE 97 (Classification International Type de l'Éducation) as a percentage of the resident population of this age band. The indicator in question is a flow indicator, calculated annually and one which, in the current structure of the system of education and training, covers pupils in secondary school education, properly speaking, in Level 3 courses of Professional Schools and in the courses of the National System of Learning covered by the designated sub-system of training integrated in the employment market. The fact that there is no numerator directly young people are considered of an age corresponding to a successful progression in the educational system confers on this indicator the nature of a net rate or one corrected for pupils repeating a year or leaving. Reference figure: 2003 – 72% • Rate of attendance on post-secondary initial training and educational courses for young people 20 years

of age Sources: Education Statistics – Ministry of Education – Department of Assessment, Prospective Studies and Planning (DAPP) – Annual publication of the DAPP in its capacity as a delegated agency of the National Statistical Institute; Education and Training – Main Indicators ME/DAPP - Annual publication whose first edition will appear in 2000. Construction methodology: This indicator expresses the number of young people aged 20 attending initial educational/ training courses at post-secondary level, whether higher or not, on a regular and systematic basis, classifiable as Levels 4 and 5 in CITE 97 as a percentage of the resident population of that age. The indicator in question is a flow indicator, calculated annually and one which, in the current structure of the system of education and training, covers pupils following higher, polytechnic or university courses of instruction and technological specialisation courses. The rate of attendance in question is a specific one in age terms, and this confers on this indicator the nature of a net rate or one corrected for flows in respect of repeating a year or leaving. • Percentage of young people annually entering the labour market, with alternating processes of training Sources: Standing Investigation of Employment The CSF III Information system Construction methodology No of young people certified in alternance training processes annually/Flow of young people entering the labour market annually.

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Note: This indicator will be the subject of review in the future, desirably still in the course of the implementation of the third CSF so as to best express the very much wider and diversified picture of training strategies shared between the school and the workplace that converge on the overall objective (to improve the transition from initial training to working life). We are referring more specifically to the training methods of the Professional Schools, secondary education Technological Courses whose recently announced curricular reform emphasises the more professionalising aspects of training, technological specialisation courses also recently regulated as well as higher education courses. This review will have to pay attention to the results meanwhile achieved by the systems for the information and monitoring of integration and professional curriculum processes, popularly known as Observatories (ODES - Higher Education diploma-holders; OPES - secondary education). Intermediate Objective 2 “To promote lifelong learning and improve the employability of the active population as a form of preventive action against unemployment” • To increase participation by active persons in training processes Sources: Eurostat and the third CSF Construction methodology: No of employed active persons annually covered by training processes/Employed active population (25-54). Note: It should be remembered that this indicator is taken from the overall commitments undertaken under the NEP. On the other hand, it is important to point out again that the results expressed by the indicator in question have multiple outside operational measures associated with them which will integrate the third CSF, as well as other developed national measures implemented outside this framework. On account of this fact, verification of the results obtained in this sphere will have to rely on two sources of information: EUROSTAT data and data from the third CSF information system. • To raise the level of qualification of the active population (WOBO) in the age bracket 25- 54 Sources: MTS/DEPP staff Construction methodology: No of WOBO, in age bracket 25-54 years, in the qualified and higher categories/Total No of WOBO in age bracket 25-54 years. Intermediate Objective 3 “To promote early action as an instrument to prevent risks of long-term unemployment” • Coverage of registered unemployed young people and adults with 6 and 12 months of unemployment

respectively with active policy measures Sources: IEFP Construction methodology: Methodology defined by the EU for the purposes of the application of the European Strategy for Employment assumed in the NEP. • To increase annually the percentage of registered unemployed with active training and employment

measures Sources: IEFP Construction methodology: No of registered unemployed with responses regarding employment and training/Total No of registered unemployed.

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Intermediate Objective 4 “To promote action facilitating the social integration of sectors exposed to long-term unemployment (backing the combination social welfare/return to the labour market) and to promote the socio-occupational integration of those particularly vulnerable to exclusion from the labour market” • Covering registered LTU cases with Personal Employment Plan Sources: IEFP Construction methodology: No of registered LTU cases with Personal Employment Plans /Total no of registered LTU cases • Growth in the participation of disabled people in active policy measures Sources: the third CSF information system

Construction methodology: Yearly no of disabled people covered by active policy measures Intermediate Objective 5 “To promote scientific and technological culture in order to improve primary education, contributing towards an active citizenship of initiative and responsibility” • Structure of qualification of the teaching body according to the level of skills acquired for an education

with consolidation of the components of experimental learning Sources: Education Statistics – Ministry of Education – Department of Assessment, Prospective Studies and Planning (DAPP) – Annual publication of the DAPP in its capacity as a delegated agency of the National Statistical Institute; FOCUS Databases 1998 (whose update for the purpose of monitoring of the measures to be carried out under the third CSF will be ensured at the appointed time). Construction methodology: This indicator reflects the impact on the development of the qualification structure of teachers collectively in primary and secondary education of the training measures and permanent updating of teachers, in spheres of training orientated towards the development of facilitated skills of learning on an experimental basis. It is an indicator which expresses the development of the relationship between the estimated number of teachers at the beginning of the period under review as already being holders of the qualifications and skills in question, plus the number of those who benefited during this period from training measures and the total number of teachers teaching in more demanding areas or spheres in terms of components of experimental learning (estimated total for 1998 of 65 000). Minimum number of training/trainee hours 40-45 hours. • Structure of qualification of teachers collectively according to the level of skills acquired, promoting

education for citizenship Sources: Education Statistics – Ministry of Education – Department of Assessment, Prospective Studies and Planning (DAPP) – Annual publication of the DAPP in its capacity as a delegated agency of the National Statistical Institute; FOCUS Databases 1998 (whose update for the purpose of monitoring of the measures to be carried out under the third CSF will be ensured at the appointed time). Construction methodology: This indicator reflects the impact on the development of the qualification structure of teachers collectively in primary and secondary education of the training measures and permanent updating of teachers, in spheres of the organisation and development of the curriculum clearly orientated towards essential knowledge (development of study and work habits/monitored study, development of inter-disciplinary projects – project area - and exploration of questions of daily life which pertain to the social training of children and young people – education for citizenship).

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It is an indicator which expresses the development of the relationship between the estimated number of teachers at the beginning of the period under review as already being holders of the qualifications and skills in question, plus the number of those who benefited during this period from training measures and the number of teachers who, given the permanent and transversal nature of education for citizenship, is taken to correspond to teachers collectively (150 000 in 1998). Minimum number of training/trainee hours 35-40 hours. Intermediate objective 6 “To promote the development of the information and knowledge-based society by shaping and certifying skills in information science and technologies and stimulating research” • Ratio no of pupils per computer in primary and secondary education 10 = pupils/computer in 2006 Sources: TIC numbers in Education – Investigation into schools – DAPP/21st Century Nonius Programme. Publication with the results of the investigations on computer supply and the level of use and integration of information technologies and communication in schools. Construction methodology: Launching of a 2-year research investigation from the year 2000, updating and extending the scope of the investigations launched in 1997 and 1998 in which a survey was conducted into the number of computers, peripherals and local networks, the type of equipment, places on the school premises where they are employed (classroom, library, laboratory, etc.), link to the Internet, educational contexts of use (curricular, multi-disciplinary project, club, etc.), educational activities in which they are used (interchange between schools, consultation and search for data, production and publication of information, etc.), disciplinary group of the teachers involved (computer science, electrotechnics/other technical subjects, mathematics, languages, etc.). • Adoption by primary and secondary schools of a multimedia product by discipline and by year Sources: Support Information System for the monitoring of the 21st Century Nonius Programme (whose update for the purpose of monitoring of the measures to be carried out under the third CSF will be ensured at the appointed time). Construction methodology: Implementation of investigations in the context of the publication of TIC Numbers in Education, already referred to. Note: These indicators will be complemented in the future, still in the course of the implementation of the third CSF, so as to express also the extent of demand and the use of TICs (examples: rate of e-mail use, use of Internet, etc. by teachers and pupils; existence of school sites and their educational/teaching use). The collection of data for this purpose will be covered in forthcoming investigations and the underlying objectives placed in context in school projects which orientate the curricular and extra-curricular use of the equipment. • Structure of qualification of the teaching body according to the level of knowledge and skills acquired in

the spheres of the integration of the new information technologies and communication in schools Sources: FOCUS Databases 1998 (whose update for the purpose of monitoring of the measures to be carried out under the third CSF will be ensured at the appointed time). TIC numbers in Education – Investigation into schools – DAPP/21st Century Nonius Programme – periodic publication whose coverage will be extended. Construction methodology: This indicator reflects the impact on the development of the qualification structure of teachers collectively in primary and secondary education of the training measures and permanent updating of teachers, in spheres of the integration of information technologies, in school life in its multiple curricular, extra/curricular, organisational, research and school community relationship dimensions. It is an indicator which expresses the development of the relationship between the estimated number of teachers at the beginning of the period under review as already being holders of the qualifications and skills in TICs, plus the number of people benefited during this period by training measures and the number of

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teachers who, given the permanent and transversal nature of education for citizenship, is taken to correspond to teachers collectively (150 000 in 1998). Minimum number of training/trainee hours 40-45 hours.

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C - PRIORITY 2 – MODIFYING THE PROFILE OF PRODUCTION TOWARDS ACTIVITIES OF THE FUTURE

Following the diagnosis referred to in Section I, the present Community Support Framework has as its strategic objective, reflected in a priority, strengthening the competitiveness of undertakings and stimulating innovation. This objective, corresponding to the modification of the national profile of production, will have to be put into practice by making the most of innovation, developing the information society, reinforcing the fabric of business (in particular in terms of small and medium-sized undertakings) and promoting human capital, aiming at an overall increase in the competitiveness and productivity of the Portuguese economy. The aim is to reconcile the modernisation of traditional activities in the Portuguese economy (like the textile, clothing, footwear and agricultural products sectors, for example) with support for the sectors which have experienced appreciable growth and in which Portugal possesses comparative advantages (as, for example, the tourism and leisure sector, the forestry sector and the transport equipment industry) and furthermore, when possible, with the development of emergent sectors as a result of the changes in world society and economy. The second strategic objective of the present priority consists of promoting interaction between the development of agricultural products, by strengthening the competitiveness of the various production sectors, and the development of rural areas rural areas as areas of opportunities in their economic, social, environmental and cultural aspects. Priority 2 of the third CSF is implemented through the following sectoral operational programmes:

• Agriculture and rural development;

• Fisheries; and

• Economy (this programme is directed at industrial, tourist, commercial and service undertakings and also undertakings in the energy sector)

In the case of this priority, the Community Support Framework lays down overall quantified objectives for the period 2000-2006 which are set out systematically in the table at the end of this chapter. As regards rural development, it was not possible, at the present stage, to establish precise quantified objectives or indicators, although it was considered desirable that, even now, specialised studies which allow them to be drawn up should be begun in time for them to be considered in the mid-term evaluation exercise. In this context, since keeping or attracting populations to the territories in question, in particular by establishing alternative employment, is one of the essential objectives of the rural development policy, it is considered pertinent, in principle, to set out indicators which specifically take into account the development of population trends in country districts, especially in mountain areas and less-favoured areas, and also the creation of alternative employment. C.1 – OPERATIONAL PROGRAMME FOR AGRICULTURE AND RURAL DEVELOPMENT The Operational Programme for Agriculture and Rural Development covers the measures to be implemented under the agricultural and rural development policy and has as its basic objective promoting the link between agriculture (as a productive, modern and competitive activity) and the sustainable development of rural areas in their economic, social and environmental aspects.

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This objective is pursued through a set of overall specific objectives, among which the following are prominent: • strengthening the economic competitiveness of agri-forestry production activities and sectors,

safeguarding environmental values and economic and social cohesion; • n incentive for the multi-functionality of agricultural holdings, compensating them for rendering

services of an agri-environmental nature or other services of collective interest, and contributing towards their internal diversification and economic viability;

• promoting the quality and innovation of agri-forestry and agri-rural production, with a view to

achieving sustained growth in productivity and efficiently meeting consumers’ requirements as regards quality and food safety;

• maximising the specific potential of rural areas and support for their development and

economic diversification; • improving the living and working conditions of farmers and rural communities, through their

rejuvenation and qualification, the promotion of employment, the protection of the respective incomes and guarantee of access to the resources and services essential to human development;

• reinforcing the socio-economic and socio-occupational aspects of the organisation, association

and initiative of farmers and of other agents of rural development, considering them as protagonists and partners of primary importance in the drawing up and carrying out of development strategies.

These specific objectives are structured in such a way as to allow the main targets to be reached which will make possible the intended link between competitive agriculture and sustainable rural development. The Agriculture and Rural Development programme is intended to contribute, via its various measures, towards achieving these objectives, which are associated with the priorities of agricultural and rural development laid down overall. The central elements of the strategy of the Operational Programme concentrate on: • improving production efficiency through measures for the modernisation, conversion and

diversification of holdings, the processing and marketing of agricultural products and the sustainable development of forests;

• creating conditions of viability and competitiveness, through the management of hydro-

agricultural resources, agri-rural services and financial engineering; • improving the potential of human resources through vocational training, technological

development and experimentation, and formative and technological infrastructures. The overall improvement of the production efficiency of regional and national production systems will accord priority to activities and systems of production which are potentially more competitive and suitable for a rational utilisation of natural and human resources, in particular forestry activities, fruit-growing, horticulture, olive-growing, extensive stockfarming, milk products, vine and wine production and quality products noted as regional and local specialities, and also an integrated approach to particular areas.

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On the other hand, the intention is to strengthen competitive capacity through the effective exploitation of specific niches and market requirements highlighting quality and innovation and, above all, by the consolidation of organisation which makes it possible to remedy the structural weaknesses of the sector, specifically at agricultural holding level. Either the general objective or some of the specific objectives referred to will also be pursued (with differentiated financing and aims) in the case of the other instruments of agricultural and rural development policy, whose convergence will serve to boost their synergy and complementarity: • measures to put into operation, through the Rural Development Plan (financed by the Guarantee

Section of the EAGGF): early reform; agri-environmental measures; the afforestation of agricultural land; and compensatory payments.

• the regulatory framework and support from common organisations of the market (Guarantee

Section of the EAGGF); • Community Rural Development Initiative (LEADER +) (financed by the Guidance Section of

the EAGGF). C.2 – OPERATIONAL PROGRAMME FOR FISHERIES Notwithstanding the efforts made in the period covered by CSF II, the restructuring of the fisheries sector will have to be pursued through the rationalisation and modernisation of the factors of production and other lasting measures. As regards the fishing fleets, it is clear, firstly, that the multiannual guidance programmes (MGP IV until 2001 and MGP V from then on) constitute the necessary basis of reference for the mechanism for the integration of fishing capacity and accordingly suitable financial resources must be made available for its implementation. However, in this connection, there are perverse effects which are to be prevented as a matter of urgency. Thus, for example, an insufficient renewal of the fleet can result in its generalised ageing, while the rapid technical development of shipbuilding and vessel equipment can cancel out the intended reduction of capacities or even aggravate the imbalance between fishing effort and available fish resources. From the technical point of view, measures will have to be pursued aiming at the use of more selective fishing gear and methods, the improvement of the quality of fish packing on board vessels and the improvement of working and safety conditions. In the case of the rest of the sector (aquaculture and processing of products), collective measures to satisfy sectoral interest and needs, considered overall, are a priority in relation to business investments. Measures to control environmental pollution, the effective utilisation and improvement of products and also the targeting of surplus, or insufficiently exploited, species will also be a priority. The Fisheries Operational Programme will have to establish sectoral priorities and indicate the respective budgetary allocations in accordance with the following spheres of action:

1. Adjustment of fishing effort. 2. Renewal and modernisation of the fishing fleet.

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3. Protection and development of aquatic resources, aquaculture, fishing port equipment,

processing and marketing. 4. Other measures. 5. Technical assistance. 6. Measures financed by the other Structural Funds under the programme.

The complete list of measures planned will have to be contained in the text of the programme. In turn, programme complements will have to include the relevant detailed description, with an indication of the respective appropriations and the quantified objectives and relevant indicators. The planned structural measures under the present third CSF in the sectors of fisheries, aquaculture, processing and marketing of fish products must comply with the rules of the common fisheries policy, even when – exceptionally - these measures are financed by a Structural Fund other than the FIFG. Such measures are subject, in particular, to the specific provisions of Regulation (EC) No 1263/99 and Regulation (EC) No 2792/99. Measures relating to the renewal and modernisation of fishing vessels are subject, in particular, to compliance with the Council Decisions adopted pursuant to Article 11 of Regulation (EEC) No 3760/92 and also with the multiannual guidance programmes (MGPs) of the fishing fleets, covered by Article 4 of Regulation (EC) 2792/99, and the provisions adopted in accordance with Title II of Regulation (EC) 2792/99. From this point of view, measures to restrict fishing effort and, in particular, measures for the definitive withdrawal of “fishing capacities” constitute priority measures in the sector. The measures in the fields of aquaculture, protected marine areas, fishing port equipment and the processing and marketing of fish products must contribute towards the lasting economic result of the structural action aimed at and offer sufficient guarantees of technical viability, preventing, in particular, the creation of surplus production capacity. Scientific support for measures relating to protected marine areas must, for their part, be subject to an annual summary report to be sent to the European Commission. In accordance with Article 3(3) of Regulation (EC) No 2792/99 of 17 December 1999, the plans laid down in Article 9(b) of Regulation (EC) No 1260/99 must justify the need for public aids in the light of the objectives set out and, in particular, in the absence of such public aids, the renewal or modernisation of the fishing fleets would become impossible. However, the measures proposed will not be able to put the equilibrium of fish resources at risk in the long term. C.3 – OPERATIONAL PROGRAMME FOR THE ECONOMY Objectives The operational programme for the Economy covers the measures of the third CSF in the spheres of industry, tourism, commerce, services and energy. Following the general objectives established in the CSF, the Economy programme establishes the following specific objectives:

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• Boosting the productivity and competitiveness of the Portuguese economy • Promoting new potential for growth and economic development Compliance with these objectives must contribute towards endowing the Portuguese economy with the resources that allow it to face growing external world competition, in a context of globalisation and rapid technological development which leads to rapid changes in the patterns of demand. The two objectives referred to develop in various specific objectives relating to each sector of activity covered by the Economy programme. Among them, we may single out as examples: Industry

• To promote the competitiveness of undertakings by boosting technical, technological and

marketing capacities and the qualification of human resources; • To foster rises in productivity via measures within undertakings and the active mobilisation

of support infrastructures; • To support the appearance of new sectors and activities of high added value and of an

innovative nature and also of competitive areas of development; • To support vocational training, improve qualifications and consolidate the skills of human

resources. Tourism

• To promote and strengthen the competitiveness of tourist undertakings; • To support the appearance of business areas based on the establishment of new tourist

products; • Το act on the critical factors of competitiveness in the sector, specifically through the

consolidation of the major centres of tourist production, the qualification and intensification of the training of professionals for the sector, and the promotion of the internationalisation of Portugal as a tourist destination.

Commerce

• To strengthen the competitiveness of the commercial sector, especially of small and

medium-sized undertakings; • To promote the gradual improvement in the skills and qualifications of active persons; • To modernise and strengthen the dynamic role of commerce and services in rural and urban

centres. Services

• To promote the supply of support services for industrial and commercial undertakings,

specifically in the spheres of logistics and distribution;

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• To improve the quality of the supply of services to undertakings, in particular in the spheres of organisation, management, information, accounting and the taxation system, and control;

• To support the vocational training of human resources, strengthening their skills and

qualifications. Energy

• To reduce dependence on outside for energy; • To reduce polluting emissions; • To reduce national energy intensity (aligning it with the Community average); • To strengthen the competitiveness of the energy markets and improve citizens’ living

conditions; • To back technological innovation and development, with the market in mind, either at the

level of renewable energy or of equipment with greater energy efficiency. Taking this set of objectives as the starting-point, the Economy programme establishes a common strategy for the modernisation of the different economic sectors (excluding only agriculture and fisheries). The option for a single measure, allowing its application - all circumstances being equal - to all the sectors, can contribute towards solving the problems recorded in the validity of CSF II and resulting from the dispersion of support for economic activity through a significant number of programmes, operating on many occasions in competition. Small and Medium-sized Undertakings (SMUs) The Economy programme will endeavour to meet the challenges referred to by targeting its measures at the development of small and medium-sized undertakings, at promoting innovation and scientific and technological research, fostering investment - not only physical but also in human capital (through the training and qualification of the labour force) – at improving the relationship between public administration and the business world, and at the protection of the environment. Support for SMUs is of fundamental importance, as is clearly apparent, moreover, from the Commission’s General Guidelines for the operational programmes of the present programming period. In this context, it should be remembered that, in the preceding period and for the European Union as a whole, SMUs benefited, directly or indirectly, from about 18% of the total financial contributions from the Structural Funds. The third CSF integrates this dimension of the support for SMUs as a necessary condition for growth and employment and accords it major priority: hence, in the Economy programme, aids to SMUs will have to represent between 50% and 60% of the total public aids granted under this programme. The measures relating to SMUs seek essentially to improve access to financing (aiming, in particular, to facilitate the establishment of new innovative undertakings), stimulate innovation (particularly intangible innovation), support internationalisation and technology transfer, improve conditions of access to the results of research and development, improve the supply of support services for undertakings (preferably on the basis of “one-stop shops”), improve working conditions, support measures for the diagnosis of the needs of undertakings, consolidate industrial cooperation and the establishment of cooperation networks, train (in particular at entrepreneur and executive level) and support rapid-growth SMUs, etc.

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The increasing importance of SMUs for the rise in the competitive status of Portuguese undertakings and, in general, for the country’s economic and social development, derives from their greater flexibility and propensity for innovation, their significant contribution towards the net creation of unemployment and the improvement of levels of qualification on the part of the labour force (especially in intensive high-technology activities), their habitually solid performance on export markets and their proximity to customers. The latter factor makes great sensitivity possible, moreover, in relation to the needs of the market, which may be decisive in a global context in which a gradual transfer of protagonism from the supply side to the demand side is taking place. Financial support under the programme will be granted in accordance with various measures provided for in other Community programmes (in particular the BEST programme) and with a view to reducing the importance of direct support for investment which in the future - and especially when financed by the Structural Funds - will have to play a lesser role. Alternative sources of financing, such as refundable aids, interest subsidies, the constitution of capital risk funds, the establishment of a loss reserve fund and of mutual guarantee companies, etc., are promoted. In order to allow an effective maximisation of the effect of the measures in favour of SMUs which are provided for in the CSF (in particular, vocational training and technological innovation measures) and their integration and support, a working party dedicated to SMUs will be set up under the CSF Monitoring Committee. Similarly, the CSF information system will have to allow the content and financial sum of the measures in favour of SMUs to be monitored on an overall basis and all relevant information to be made available on the execution of the measures in question, including data on the private investment corresponding to the public financing granted. In addition, appropriate impact and result indicators will be established. System of incentives to micro-undertakings The programme will include a system of incentives for the benefit of micro-undertakings. The rapidity and efficiency of the management of this system (particularly in terms of terms of selection deadlines and terms of payment) must be guaranteed; bearing past experience in mind, it will have to be collated with the submission of a very large number of applications. With this objective in view, an annual analysis of the operation of that system must be carried out by the SMU working party referred to above, in such a way as to allow any adjustments which prove relevant to be introduced in good time. This analysis will have to make it possible to lay down, in accordance with the principles of partnership and flexibility, formulas which allow the execution and system of management, project selection and the monitoring of this system of incentives to be gradually decentralised by involving and bringing in regional and local public bodies and economic agents. Special attention must be given to the aspects referred to, such as informing promoters of projects, in such a way as to guarantee effective alignment between those for whom the programme is intended and the bodies in charge of their management. The system of support for micro-undertakings must be selective, according priority to the choice of innovative projects and linking its support to certain conditions being in place which are necessary for the actual development of competitiveness and productivity among undertakings of this kind and relating, for example, to vocational training, training for management, the internal organisation of undertakings, technological innovation and the establishment of networks. It must further be ensured that there are no overlaps between the different systems of support for small and micro-undertakings provided for in the third CSF resulting from drawing up the relevant dividing lines in terms of promoters as a body and project typologies. This consideration applies, in particular, to the relations between the system of incentives of the Economy programme and the system for the support of the creation of unemployment as part of local development, as apparent from the decentralised component of the regional programmes of continental Portugal. In this context, it is of fundamental importance to ensure the existence of “one-stop shops” which can duly advise entrepreneurs.

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Innovation The operational measure relating to the Economy will also have to assign substantial importance to promoting innovation, giving substance, under Priority 2, to the general principles set out above, when the overall strategy of the third CSF was established. A major proportion of the public financial resources intended for that programme will thus have to be allocated to stimulating and developing innovation in Portuguese undertakings. This objective will have to be combined with measures to be developed under Priority 1 (particularly those provided for in the Science, Technology and Innovation programme). The Economy programme will support measures involving identifying the needs and opportunities of undertakings and also informing and training entrepreneurs, stimulating the creation of a favourable environment for the development of the entrepreneurial spirit. Measures in relation to intellectual investments, making those investments which are necessary in the field of innovation and supporting them through the establishment of suitable mechanisms for financing undertakings must additionally be carried out. It will be also necessary to prioritise measures supporting the establishment of networks of undertakings as a deciding factor in the improvement of their competitiveness. Indeed, the establishment of these networks makes it possible to reduce costs, minimise the risks and maximise the profits of the undertakings concerned. It may finally be mentioned that innovation measures will have to be accompanied by corresponding support in the field of quality and certification. Human resources The vocational training developed under the Economy programme is closely linked to the needs arising from business investment projects and will have to strengthen and adjust the qualifications and skills of human resources of undertakings and of organisations involved in business, particularly in the areas of management, quality, innovation, scientific and technological development, and other strategic areas suitable for the development of new activities, products or services. The platform of skills, in other words the overall technical and management knowledge possessed by undertakings and their capacity for anticipation and adaptation to the changes in technological systems and in organisational and production models, constitutes one of the key questions in the development and consolidation of the fabric of business. The low levels of skills of the active population constitute, as was referred to, a structural limitation of the Portuguese economy. The recognised shortage of strategic skills at the top of undertakings, especially in the micro- and small undertakings which make up the bulk of the fabric of national production, and their effects in relation to the generalised absence of modern forms of management, the low level of training of entrepreneurs and the low propensity to invest in complex factors of competitiveness require a major effort in terms of the qualification of human resources as condition for achieving the objectives of the Economy programme. It should also be mentioned that this programme does not exhaust all the measures of this area, and that other measures have a direct impact on its performance and objectives. The operational programmes of CSF Priority 1 must contribute, both at initial training level and at continuing education level, towards the consolidation of the supply of qualified labour and thus constitute an indispensable complement to the measures provided for in Priority 2. This fact means that efficient forms of interlinking between different measures should be defined, namely with the Training, Employment and Social Development operational programme in a pro-active approach to anticipate the needs of qualifications and skills of the fabric of business. Energy It must pointed out that the regulations approving the Structural Funds stimulate the application of methods of financing which reduce the cost and extent of public financing (national and Community), in particular through the use of financial engineering techniques for investments in

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infrastructures generating substantial net revenue. This being the case, the realisation and modulation of the financial contribution from the Funds to projects in the energy sector (especially in the completion of the natural gas project), will be subject to subsequent analysis whereby the respective gross margins of self-financing can be determined. Priorities of action Under these conditions, the following priorities of action for the Economy programme are defined: • Acting on the undertaking’s competitive factors. This priority aims specifically at promoting

the consolidation of the skills and technological processes of undertakings and making them feasible, promoting modern management practices and marketing networks and promoting the participation of undertakings on the global market.

• Promoting strategic areas for development. This priority aims to promote projects, products

and activities, in a horizontal and non-discriminatory way, with potential - in strategic terms - for the consolidation of the overall competitiveness of the Portuguese economy and for its repositioning on the world market, given its innovative content in terms of technologies, processes and market niches to be reached. Particular attention will be paid to areas with potential for sustained development, through the effective utilisation of natural and cultural resources and knowing how to act in the Portuguese way in obtaining or promoting products of excellence and high quality, with an international appeal. The aim is further to stimulate a conception of business development which favours orderly distribution over the territory which is respectful of the environment, to adjust the qualifications and skills of existing active persons to the growing needs of undertakings and organisations of the economic fabric and to promote innovation, stimulating new initiatives and mobilising new entrepreneurs. The aim is, finally, to support energy-saving, rationality in the use of energy and the development of renewable energy.

• Improving the business environment. This priority provides for support for the promotion

and consolidation of the supply of services to undertakings, on the basis of technological capacity and innovation, and it refers especially to support for new entrepreneurs, the consolidation and guidance of infrastructures supporting business activity and the promotion of strategic measures for associative business structures. The establishment of instruments which allow the financing conditions of undertakings to be improved, particularly in the case of projects with a highly innovative component and of new entrepreneurs, and which allow the establishment of an international environment favourable to action by undertakings, promoting the image of Portugal and associating the country and its supply with quality, innovation and differentiation, will also be supported as part of this priority. Finally, projects for the development of energy networks (particularly natural gas) will be supported.

88

Qua

ntifi

ed o

bjec

tives

and

indi

cato

rs

P

RIO

RIT

Y 2

– M

OD

IFY

ING

TH

E P

RO

FILE

OF

PR

OD

UC

TIO

N T

OW

AR

DS

AC

TIV

ITIE

S O

F T

HE

FU

TU

RE

AG

RIC

ULT

UR

E A

ND

RU

RA

L D

EVEL

OPM

ENT

Initi

al s

ituat

ion

Obj

ectiv

e 20

06

•

(1) W

ork

prod

uctiv

ity, m

easu

red

usin

g th

e re

latio

nshi

p be

twee

n G

VA

pm a

nd A

gric

ultu

ral W

ork

Uni

ts

(AW

Us)

GV

Apm

per

AW

U

ES

C 7

30 8

00 (1

998)

/AW

U

Y

early

ave

rage

gro

wth

from

4 to

5%

•

(2) T

otal

out

put p

er A

WU

, mea

sure

d us

ing

the

rela

tions

hip

betw

een

the

outp

ut o

f agr

icul

tura

l w

ork

(VA

Lcf-

Inco

mes

-inte

rest

+inc

ome

aids

se

para

ted

from

pro

duct

ion)

and

tota

l AW

Us

785

400

(199

8)

Yea

rly a

vera

ge g

row

th fr

om 4

to

5%

•

(3)

Inve

stm

ent e

ffort,

mea

sure

d us

ing

the

perc

enta

ge o

f th

e G

VA

pm to

be

assi

gned

to G

FAF

GFA

F/G

VA

pm

16.3

% (1

994-

97 a

vera

ge)

20%

, for

the

aver

age

of th

e pe

riod

•

(4)

Exp

orts

from

agr

icul

ture

, for

estry

and

the

agrif

ood

indu

stry

ES

C 2

60 9

44 (1

998)

mill

ion

Y

early

ave

rage

gro

wth

from

3 to

5%

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onst

ruct

a s

olid

alli

ance

bet

wee

n ag

ricul

ture

as

a pr

oduc

tive,

mod

ern

and

com

petit

ive

activ

ity,

and

the

sust

aina

ble

deve

lopm

ent

of

rura

l ar

eas

in

envi

ronm

enta

l, ec

onom

ic a

nd so

cial

asp

ects

.

•

(5

) Util

ized

Agr

icul

tura

l Are

a (U

AA

) sub

ject

to

stan

dard

s of g

ood

agric

ultu

ral p

ract

ices

(as %

) -

65 to

75%

of t

he U

AA

(1

) to

(3) –

Sou

rce

of th

e in

itial

figu

res:

INE,

Agr

icul

tura

l Eco

nom

ic A

ccou

nts (

exce

pt fo

r inc

ome

aids

sepa

rate

d fro

m p

rodu

ctio

n: IF

AD

AP)

(1

) and

(2) –

Lat

est a

vaila

ble

figur

e fo

r con

tinen

tal P

ortu

gal i

s 199

7. F

or 1

998,

the

valu

es w

ere

extra

pola

ted

for c

ontin

enta

l Por

tuga

l fro

m th

e 19

98 ra

te o

f ann

ual v

aria

tion

for t

he c

ount

ry a

s a

who

le.

(3

) – 1

997

is th

e la

test

ava

ilabl

e fig

ure

for c

ontin

enta

l Por

tuga

l and

the

coun

try.

This

indi

cato

r is s

ubje

ct to

mar

ked

annu

al fl

uctu

atio

ns a

nd m

ust b

e vi

ewed

as a

vera

ges f

or a

cer

tain

per

iod.

(4

) – S

ourc

e of

the

initi

al fi

gure

s: E

stim

ates

on

the

basi

s of

the

1995

Nat

iona

l Acc

ount

s (IN

E) a

nd th

e ra

tes

of v

aria

tion

of h

eadi

ngs

corre

spon

ding

to a

gric

ultu

re, f

ores

try a

nd th

e ag

rifoo

d in

dust

ry (0

1, D

A, 0

2 an

d D

D+2

1) o

f the

“In

tern

atio

nal T

rade

Sta

tistic

s” (I

NE)

FISH

ERIE

S

Initi

al s

ituat

ion

Obj

ectiv

e 20

06

To s

treng

then

the

com

petit

iven

ess

of th

e se

ctor

and

of

the

qual

ity o

f fis

h pr

oduc

ts t

hrou

gh t

he r

enew

al o

f pr

oduc

tion

stru

ctur

es a

nd fa

bric

of b

usin

ess

and

labo

ur.

•

Incr

ease

in p

rodu

ctiv

ity, m

easu

red

usin

g th

e

GV

A o

f the

sect

or/S

taff

in se

rvic

e •

A

quac

ultu

ral p

rodu

ctio

n/La

ndin

gs o

f fre

sh fi

sh

•

Bal

ance

of e

mpl

oym

ent c

reat

ed (2

)

3.

4 (E

SC 1

06 ) (1)

5% (1

998)

In

crea

se o

f 5%

10%

+ 50

0

(1) H

avin

g as

its b

asis

avai

labl

e in

form

atio

n re

latin

g to

the

fishe

ries a

nd fi

sh c

onse

rvat

ion

bran

ches

– IN

E/ N

atio

nal A

ccou

nts (

1994

) (2

) Ref

ers

excl

usiv

ely

to th

e ba

lanc

e of

em

ploy

men

t cre

ated

by

the

Fish

erie

s Ope

ratio

nal P

rogr

amm

e.

89

ECO

NO

MY

Initi

al s

ituat

ion

O

bjec

tive

2006

•

V

olum

e of

bus

ines

s re

sulti

ng fr

om n

ew p

rodu

cts,

inno

vativ

e ac

tiviti

es a

nd n

ow p

oten

tials

for

deve

lopm

ent /

Tot

al v

olum

e of

bus

ines

s of

PO

E un

derta

king

s

20

%

•

Inve

stm

ent i

n R

& D

+ In

nova

tion/

Tota

l inv

estm

ent

10%

To s

treng

then

the

pro

duct

ivity

and

com

petit

iven

ess

of

unde

rtaki

ngs

and

also

the

ir pa

rtici

patio

n in

the

glo

bal

mar

ket b

y pr

omot

ing

new

dev

elop

men

t pot

entia

ls.

Gen

eral

obj

ectiv

es:

To

pro

mot

e ne

w d

evel

opm

ent p

oten

tials

In

vest

men

ts in

R &

D +

Inno

vatio

n (P

OE)

Com

petit

iven

ess a

nd P

rodu

ctiv

ity (P

OE)

(1)

•

Rat

e of

gro

wth

(und

erta

king

s sup

porte

d co

mpa

red

with

th

e to

tal)

GV

A/J

ob

•

Var

iatio

n in

sale

s/La

bour

cos

ts

15

-20%

20%

•

SM

U in

cent

ive/

Tota

l PO

E in

cent

ive

•

Tot

al v

aria

tion

prim

ary

ener

gy/G

DP

in K

gpe/

EC

U 1

0 00

0 •

N

atur

al g

as/T

otal

fina

l ene

rgy

•

Per

cent

age

of re

new

able

ene

rgy

in to

tal p

rimar

y en

ergy

34

9.1

(199

7)

0.4%

(199

7)

10

.4%

(ave

rage

of y

ears

199

0-19

95)*

**

50

%-6

0%

-2

0%

6%

Stab

ilise

Spec

ific

obje

ctiv

es:

-

SMU

s In

vest

men

t

- En

ergy

En

ergy

inte

nsity

(PO

E) *

* C

ontri

butio

n to

war

ds e

nerg

y di

vers

ifica

tion:

N

atur

al g

as

Ren

ewab

le e

nerg

y

-

Trai

ning

•

Inve

stm

ent i

n tra

inin

g /

Tota

l inv

estm

ent

4 to

6%

- En

viro

nmen

t C

ontri

butio

n to

war

ds

redu

cing

G

reen

hous

e Ef

fect

Gas

es (G

EGs)

•

Var

iatio

n G

EG e

mis

sion

s (in

con

nect

ion

with

PO

E)

CO

2 em

issi

on

(to o

btai

n th

e cu

rrent

situ

atio

n -

1999

)

R

educ

e 15

-20%

(1) T

he p

ropo

sed

indi

cato

rs re

flect

the

obje

ctiv

e of

gre

ater

ann

ual g

row

th in

labo

ur p

rodu

ctiv

ity in

the

unde

rtaki

ngs i

n co

nnec

tion

with

the

POE

by c

ompa

rison

with

the

unde

rtaki

ngs o

f elig

ible

sect

ors

** T

he re

duct

ion

prov

ided

for m

ust b

e ca

lcul

ated

the

valu

e re

latin

g to

199

9 ta

king

as i

ts st

artin

g-po

int d

irect

ly th

is is

ava

ilabl

e (D

GE)

; ***

Doe

s not

incl

ude

biom

ass

90

D – PRIORITY 3 – ASSERTING THE VALUE OF THE LAND AND PORTUGAL’S GEO-ECONOMIC POSITION

1. GENERAL ASPECTS The establishment of CSF Priority 3 (“Asserting the value of the land and Portugal’s geo-economic position”) is based on a vision of Portuguese territory which seeks to reconcile the exploitation of the competitive advantages resulting from the country’s geographical position, which transforms it into the first possible Atlantic landfall of a Europe occupying a central position in the global economy with the requirements imposed by a balanced process of territorial integration, founded on the principle of sustainable development, bearing in mind the need to correct the current disparities between regions and the characteristics and potential of the national urban system. Portuguese territory is both an area of activity and residence of a population with skills and aspirations of their own which are a factor in the organisation of economic activity. With a view to development, its effective utilisation is governed by the problems associated with “interiority”, in other words, by the clear distinction, in terms of resident population, economic dynamism, internal and international accessibility and endowment with collective equipment and infrastructures, between a coastal strip extending from Viana do Castelo to Setúbal and all the rest of the country outside this coastal strip (in which the regions of Alentejo and the Spanish border may further be prominent on account of their greater relative backwardness). The interior of the country, more than the coastal area of a country which, in external terms, has the coastal situation as its chief characteristic, must be thought of as a set of regions marked by specific problems based, on the one hand, on low population density and the isolation of the economic players and urban centres and, on the other, the absence of international trade and contacts capable of bringing out innovative business strategies. As general objectives of a policy for the correction of regional disparities and the alignment between the coast and the interior, the integration of the latter into the competitive dynamics of the global economy and, at the same time, the exploitation of its specific advantages, in terms of historical and cultural heritage and environmental quality in particular, can be laid down. The pursuit of these aims entails attention being paid to some basic questions, on whose solution the success of the strategy followed depends. Thus it is vital to promote creativity and the entrepreneurial spirit and to improve qualifications among the people so as to guarantee economic dynamism; likewise, the development of towns needs to be stimulated, allowing them to reach sufficient size to establish their populations and offer qualified services to economic activity. Similarly, the ease of communications between inland regions and other regions of the country or abroad, allowing wide access to the markets of goods and services, capital and inputs and an ongoing exchange of experiences which sustains innovation processes, is clearly an essential factor in combatting the disadvantages resulting from “interiority” (and it is obviously facilitated by technological progress in telecommunications). In a world economy characterised by the intensification of trade and services and by the constant reciprocal involvement of national economies, the territory is a factor of economic competitiveness and a priority instrument in the international integration of Portugal’s economic area. From this point of view, the following dimensions, among others, ought to be considered: • the importance of the seaboard, which places the country in a position of Atlantic centrality, and

the existence of ports in which conditions are good and which are easily accessible;

91

• the importance of the archipelagoes of Madeira and the Azores, from the point of view of

economic activities and the activities of science and technology which are linked, in particular, to the ocean and to space;

• the important position of tourist regions like Algarve and Madeira, which can contribute

towards consolidating the internationalisation of the Portuguese economy; • the loss of importance of distance as a factor in competitiveness, although peripheral regions,

and especially the island regions, continue to be penalised in their relations with the outside world;

• the intensification of the movement of capital and foreign direct investment, which give the

territory a new lease of economic life. From the complementary facet of a strategy of sustainable development, the territory is the spatial context of a policy focusing on the preservation of major ecological balances which voluntarily covers measures for economic development, allowing the necessary growth to be balanced with a high degree of environmental protection. From this point of view, it is also important to set out some specific requirements of policy action, such as: • the improvement of the quality of life and the conditions of health of citizens through the

rational management of natural resources; • the consolidation of the policy of conserving and managing the natural heritage and landscape,

making the maintenance of biodiversity compatible with human presence and traditional economic activities (agriculture, fisheries, tourism);

• the continuation of the investments of recent years intended to achieve high quality parameters

in supplied water and in the treatment of waste water, or aimed at stepping up the recycling and re-use of materials and at the effective utilisation of waste in terms of energy;

• combining the management of water resources with sectoral policies and the policies of regional

development and town and country planning; • the general integration of the environment factor in sectoral policies and in the measures

supported by the Structural Funds. Consideration of the territorial dimension in the third CSF is further expressed in the operational measures of Priority 4. The regional programmes of continental Portugal and the operational programmes of the Azores and Madeira cover a large number of projects in the transport and environment sectors, so that the overall national effort in these sectors cannot be considered without taking into account the amounts of money mobilised in connection with those measures. 2. COHESION/CONSISTENCY FUND, COMPLEMENTARITY AND FRAME OF

REFERENCE The conformity of the projects submitted to the Cohesion Fund with the general strategies drawn up for the transport and environment fields entails, as part of their assessment, the drawing up of a frame of reference for the measures of this Fund, even before the approval of the sectoral programmes in the spheres covered by the Cohesion Fund. This indicative frame will constitute the priority instrument for the coordination of the measures financed by the ERDF and the Cohesion Fund, so as to prevent inconsistencies and overlaps of specific strategies or measures and optimise the complementary effect of Community financing operations. It will also allow consistency to be

92

ensured with any measures supported by other contributions from the Community budget and by the European Investment Bank and other financial instruments of the European Union which are still complementary to the operational programmes of Main Priorities 3 and 4 of the third CSF and, in the case of the environment, to the measures and projects integrated in other operational programmes, as a result of the transversal nature of the policy for the protection of the environment. The characteristics of the frames of reference for transport and the environment are indicated in the following tables.

93

Transport The frame of reference for transport will be structured as follows: • Indication of the strategy and priority areas of action for the period 2000-2006 in the case

of trans-European networks. Justification of these strategic options in accordance with national and Community priorities.

• Drawing up of overall objectives, in particular in terms of modal equilibrium, quantified

by means of suitable indicators. Reference to the objectives will also be made in terms of corridors, systems and nodes.

• Estimate of the overall investments associated with the strategy referred to, quantification

of the investments for corridors, modes of transport and nodes (supported in appropriate cartography) and foreseeable implementation schedule.

• Identification of the priority measures of sources of financing, specifying the criteria for

distribution between the Cohesion Fund and the ERDF. • Identification of the systems and indication of the national guidelines in relation to major

structuring projects. • In relation to multimodal project No 8 of the trans-European Networks, specific reference

must be made to: (i) the objectives quantified for the overall project; (ii) the corridors and intermodal intersections pertaining to this project accompanied by appropriate maps; (iii) the results anticipated for 2006; (iv) the total investment needed and the investments by priority to be made in the period 2000-2006; and (v) the resources to be mobilised, broken down by financing source.

• Drawing up of the financing arrangements, especially those resulting from the use of

public/private partnerships, the application of the “polluter pays” principle and recourse to loans from the European Investment Bank.

Environment The frame of reference for the environment will cover the three priority areas of action in this sphere (water supply, waste water treatment and waste treatment) and will contain the following data in particular: • recapitulation of the quantified objectives to be reached in the period 2000-2006 in the

three priority spheres of environmental infrastructures; • explanation of the planned strategy for achieving the objectives laid down; • drawing up of the planned measures per basin with the support of appropriate

cartography. These measures must be orientated towards the implementation of integrated systems of water management and also towards complete systems for the collection, treatment and effective utilisation of waste. The segments lacking to complete the systems will have to be identified;

• estimate of the necessary investments (by system and basin);

94

• indication of the major projects for which feasibility analyses are in progress; • sources of financing, with an indication of the criteria for allocation between the ERDF

and the Cohesion Fund; • provision for any EIB loans; • planned mobilisation of private capital for the financing of these infrastructures; • seeking the maximisation of the lever effect; • arrangements for the application of the “polluter pays” principle; • planned arrangements for the coordination of projects with a cross-border

dimension. 3. TRANSPORT 3.1. Recent developments in investments in the transport sector Investments relating to the national transport system and made from 1989 complied with the requirements resulting from the inadequacy of the basic infrastructures of the country, remedying backwardnesss, deficiencies and needs for adjustments long since identified but whose solution only became possible with the financial support of the ERDF and the Cohesion Fund. This cycle of investments was, in general, characterised by the extension, renewal and modernisation of land transport (road and railway) networks, by the extension, equipping and establishment of links to national ports, by the extension and improvement of conditions of service at airports in the country (including those in the autonomous regions) and by the closure of the road networks in the metropolitan areas of Lisbon and Oporto. In particular, major progress was achieved in the establishment of the basic road network (ordinary and supplementary) but, despite the marked increase in projects relating to railway infrastructures, the hoped-for results in respect of this mode of transport were not entirely achieved, and it still shows signs of being used less than in the case of international patterns. At the same time, a new cycle of investments was prepared, based on the organisation and management of the system most consistent with the process of European integration and the demands of international competition. In this connection, the following should be pointed out in terms of what has been done:

• as regards the management of the transport system, the separation between the regulations and the inspection of the different modes of transport, the establishment and management of infrastructures and the operation of transport services, opening up some of these areas to the private sector and fostering, through the privatisation of part of the capital of traditional public undertakings, participation in the sector of joint capital undertakings;

• in terms of their organisation logic, the importance of the complementarity of the modes of

transport was recognised and modal interfaces with ports and airports began to be developed.

95

Portugal/Spain – Rest of Europe multimodal link

Although it is not a project which has already been implemented in full, the “Portugal/Spain/Europe multimodal link” (Priority Project 8 of the trans-European networks), which replaced the previous “Lisbon-Valladolid Motorway” project, does merit special mention in this context on account of its importance and innovative nature. This project, which covers road and rail communications, ports and airports, will constitute the basic component of the international accessibility of the country and covers the following three main Iberian corridors, all linked or included, on Portuguese territory, with the “North/South” coastal corridor: • “Galician/Portuguese corridor”, which will link Corunna/Vigo/ Orense/Oporto/ Lisbon by

road and rail, with direct connections to the ports of Viana del Castelo, Leixões, Aveiro and Lisbon/Setúbal and the airports of Pedras Rubras and Portela;

• “Irun/Portugal corridor”, which will link Irun/Valladolid/Guarda/Lisbon/Oporto by road

and rail with direct connections to the ports of Leixões, Aveiro and Lisbon/Setúbal and the airports of Portela and Pedras Rubras; this corridor will have a supplementary route, in the south which will cover the railway from Beira Baixa to a new motorway incorporating sections of IP 6 and IP 2;

• “Mediterranean corridor” (or European south-west) which will link

Lisbon/Faro/Huelva/Seville by road and rail (the latter two towns only by road), taking in the airports of Portela and Faro.

3.2. Potential development axes From the point of view of long-term strategy, the potential development axes of the Iberian Peninsula must constitute the starting-point: continued access to the centre of the European Union requires coordinated action at all levels between the Portuguese and Spanish authorities. On the basis of the consideration of the relations between the potential development axes in Iberia, the transport infrastructures and the Portuguese urban system, a basic structure interlinking the territory and the urban system can be identified, constituted as follows:

North/South coastal corridor

- The North/South coastal corridor comprises the Galician/Portuguese corridor, the objective of which is to strengthen the relations between the centre and north of the country with Galicia, thereby aiming to confer a new centrality to the metropolitan area of Oporto, which will have new opportunities for development and affirmation in the peninsular north-west. The North/South corridor strengthens the interlinking role of the urban system centred in Lisbon.

- The North/South coastal corridor includes IP 1 from the border at Valencia to the border of

Castro Marim, the railways of Minho, from north to south, the airports of Oporto, Lisbon and Faro and the ports of Viana del Castelo, Leixões, Aveiro, Lisbon, Setúbal, Sines, Portimão and Faro.

96

Transversal priorities and structuring diagonals

- The axes represented by IP 5/3 and IP 7 are transversal structuring axes of the national

territory which link the coast and the interior and establish the main land links with Spain and Europe, while the axis of IP 5 also incorporates the Beira Alta railway. To these transversal axes, a set of “diagonals” is added, examples of which are the Douro diagonal (made up of IP 4 between Oporto and Vila Real, and IP 3 between Vila Real and Chaves), the Vale do Ave diagonal (made up of IC 5 and IC 25) and the Tagus diagonal (made up of IP 6 and IP 2, between Guardete and Guarda, and the Beira Baixa railway).

- The examples noted allow the structuring role of these diagonals, with reference to the cases

recorded. The two diagonals from the north allow the link between Spain and the Rias Bajas motorway, across the border from Vila Verde da Raia; the diagonal from the Tagus possesses the conditions to be the main link from the Lisboa e Vale do Tejo region to Madrid and to the centre of the Union, via the border at Vilar Formoso.

- On the other hand, it is along these axes that, outside the coastal strip, the most significant

territorial dynamics take place, with the increase in accessibility constituting a factor of consolidation and expansion of these dynamics in areas of greater demographic, social and economic fragility.

Territorial cohesion axes

- Territorial cohesion axes complement the structuring system and guarantee conditions of

accessibility to less-populated and less dynamic areas and to smaller urban centres which polarise and structure these areas.

- IP 2 constitutes a cohesion axis within Alentejo and has to guarantee good interlinking

conditions between the towns of Beja and Portalegre and the structuring axes IP 1, IP 7 and IP 6.

- The sections of IP 2 between Guarda and Bragança, of IP 4 between Macedo de Cavaleiros

and Vila Real and of IP 3 between Vila Real and Viseu, constitute a mesh interlinking and integrating the north-east in the national urban system.

- The cohesion axes must guarantee the link between regions inland and the border and the

structuring axes and the north/south coastal corridor, the interlinking of the border with the trans-border links, improving the border’s permeability, the interlinking of the towns of Bragança, Mirandela, Portalegre and Beja with the surrounding urban network, and the consolidation of the centrality of the urban axis of the towns Guarda/Covilhã/Fundão/Castelo Branco and the town of Évora.

- The regional road networks will continue to play a decisive role in consolidating territorial

cohesion and the urban system (through, for example, their contribution towards the establishment of networks of towns, virtual metropolises or urban axes) and will have to be integrated in the local transport systems. The cohesion axes must guarantee the link between inland regions and the border and the structuring axes and north/south coastal corridor; the interlinking of the border with trans-border links, improving the permeability of the border; interlinking the towns of Bragança, Mirandela, Portalegre and Beja with the surrounding urban network; and the consolidation of the centrality of the urban priority Guarda/Covilhã/ Fundão/Castelo Branco and the town of Évora.

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3.3. Challenges and guidelines The transport policy in the next few years seeks mainly to reconcile two major challenges involving, on the one hand, the need to strengthen the competitiveness of the Portuguese economy in a world context characterised by the acceleration of the globalisation process and, on the other, the requirements of internal cohesion and solidarity. The response to the first challenge is determined by an innovative strategic concept which, being based on the consideration of the emergence of a new European centrality, commends the establishment of national territory as the first point of entry into this Europe which would thus be taken as a priority area of international trade. This is accompanied by the increasing international integration of the country, in particular in the areas of Iberia and Europe, requiring the consolidation of the main centres of development of national territory (in particular, of the metropolitan areas of Lisbon and Oporto) and involves particular emphasis being placed on the logistical aspects of the transport system. The second requirement must be reflected in measures to remedy the backwardness of the less-developed regions of the country, with priority being accorded to the expansion and strengthening of the regional urban system, with special attention paid to intermediate towns. One other factor conditioning Community measures in the transport sector has to do with the foreseeable requirements arising from the trends in the development of the common transport policy. In this connection, mention ought to be made of three main thrusts:

• the effective utilisation of integrated systems, complementarity, multimodality and of the establishment and development of links, nodes and interconnections which allow bottlenecks to be eliminated, incomplete sections to be finished and major priorities to be completed so as to increase the efficiency of transport systems;

• the introduction, under the Maastricht Treaty, of environmental concern in relation to

transport systems, reflected in the gradual internalisation of environmental costs in the respective prices, with the inevitable loss of competitiveness of travel by road in favour of more efficient modes of travel from the environmental point of view;

• the clarification of relations between the State and undertakings in the sector, harmonising

the processes for contracting out work in the public service, reducing recourse to State aids with a view to maximising the lever effect.

Community action in the field of transport will furthermore, in accordance with the Treaty of Amsterdam, be covered by the consideration of environmental concerns so as to ensure the establishment of a sustainable transport system and contribute towards maintaining the intrinsic environmental importance of national territory. This objective entails a gradual assimilation of environmental costs in fares which stems in particular from a more stringent application of the “polluter pays” principle and which will have to be reflected in transfers of traffic in favour of less polluting modes of transport, in full compliance with the obligations of Kyoto in relation to air quality. Internationalisation and economic integration Within the framework of this objective, basic guidance for the development of the transport sector and respective infrastructures in the next few years consists of stepping up the effectiveness and efficiency of transport systems, as key factors in their competitive capacity on the international market and, in particular, the Iberian Peninsula. Indeed, the national economy has to face competition on international markets and reductions in transport costs or times are a powerful factor in increasing the competitive advantages of the country. The investments to be carried out must thus contribute towards the reduction of costs and travel times and result in improvements in the capacity of networks, in the reliability of the systems and in the quality of performance and services, particularly as regards safety.

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The peripheral situation of the country means there is an urgent need for direct access to major world routes for the transport of goods (particularly container transport), the movement of people and the transmission of information. It is important to continue constructing and modernising the main corridors of the trans-European networks which link Portuguese territory to Europe, especially those which contribute towards realising Multimodal Project 8. In this connection, coordination must be ensured between the Portuguese and Spanish authorities in relation to drawing up outlines, the inter-operability of networks, the performance objectives for the different corridors and the time of implementation of the specific projects, while the European Commission will take the results of the bilateral negotiations between the two Iberian countries into account when drawing up the guidelines for financings from the Structural Funds. Priority will be given to completing operational systems by 2006 so that Community intervention can produce a significant impact in terms of economic and social cohesion. In this context, the completion of the networks and the elimination of bottlenecks of capacity will follow up the measures already initiated in the previous programming period, guaranteeing the continuity and flow of traffic. The intermodal aspect is also of major importance and is reflected in concrete form in the launching of the necessary investments for the establishment of interlinking platforms between the various modes of transport which ensure a smooth journey for passengers and goods in their respective way and allow the most suitable combinations of modes to be used to ensure the link between a given origin and a final destination. The multimodal platforms to be created in this context (number, types, size and location) will, however, have to be defined as part of a cohesive strategy at national level and by reference to all modes. Cohesion and internal solidarity Consideration of the second objective of the transport policy requires careful thought to be given to the instrumental role of the transport system in restructuring the urban system. On the one hand, the difficulties in internal links contribute towards aggravating the differences in the economic and social situation between the coast and the interior and the south of the country. On the other, the consolidation of the role of towns, their capacity to function as centres integrating the surrounding territory, and the relations between the more important urban centres, essentially depend on the correct design of the existing network of communications in the country. In this context, the transport system is faced with new spatial dynamics and logics. Thus the organisation of the corresponding infrastructures in accordance with district capitals or the council headquarters is superimposing itself on the basis of an organisation founded on networks and priorities of territorial interlinking which not only reflect the current locations of political, economic and social agents but also the requirements of town and country planning and, furthermore, local, regional, and even national, development strategies. To produce real effects, however, this movement for the improvement of the conditions of accessibility to inland areas must be accompanied by other measures with a social and economic impact (establishment of universities and polytechnic centres, the decentralisation of services and support for economic activity). 3.4. Objectives, priorities and results expected for the period 2000-2006 3.4.1. In the next few years, and with the completion of basic infrastructures, fundamental questions regarding the transport system will focus on the quality of the service, operational efficiency and competitive capacity vis-à-vis the international market and especially on the Iberian Peninsula, so as to allow the following four main challenges to be met:

99

The international integration of the country, in particular of the European and Iberian area,

and integration of the economy in the processes of globalisation, entailing the identification of the priority components of the transport system which are decisive as far as the process of internationalisation is concerned, allowing full exploitation of the country’s geographical position, in particular as regards its specialisation as the hub of goods and passenger traffic, associated respectively with ocean-going transport and air transport. Among these components, major port and airport projects are prominent (Port of Sines; Lisbon/Setúbal/Sines port system; Port of Leixões; Airport of Oporto; New Airport; Airport of Faro; Aerodrome of Beja and Cascais) and three major land transport infrastructure projects (land corridors of Portugal/Spain/Rest of Europe multimodal link; Lisbon/ Madrid/Barcelona goods railway link; Lisbon/Oporto/Madrid high speed train).

Air transport The new airport is an important project from the point of view of the internationalisation of the economy and the increase in the flows of passengers from and to national territory and the Iberian peninsula. The advisability of this investment and the conditions relating to its implementation must, however, be analysed particularly carefully and, moreover, its profitability must be guaranteed. Given the self-financing capacity of infrastructures of this type, which generate substantial receipts, the investment will mostly have to come from the private sector. Possible support from the Cohesion Fund must be limited, to cover any shortcoming in profitability and to maximise the lever effect of Community resources. As regards the country’s other Airports, reference deserves to be made to the ongoing study on Faro airport. Development works in Faro and Oporto airports will, on the other hand, continue to be supported. Continuity in consolidating territorial cohesion with ultraperipheral regions will also have to be given through support for the airport infrastructures of the Azores. Road transport It is thus essential that the major priorities linking us to Europe should be completed and their connection to the main Portuguese ports ensured. The concern to foster a balance between the different modes of transport will have to be reflected in a limitation of the negative externalities associated with roads and will have to lead to the gradual but systematic internalisation of environmental costs, so as to reduce their competitiveness in relation to more sustainable forms of transport. The investments needed for the completion of the PNR [National Recycling Plan], whereby a network of 3 000 km of motorways will be able to be achieved by 2012, entail recourse to forms of public and private partnership which aim to diversify sources of financing. The road projects financed by concession and SCUT systems will have to go up to EUR 3 100 million in the period 2000-2006. In this same period, the construction of 800 km of IPs and ICs and the overhaul of 700 km of motorways and national and regional roads are planned using ERDF financing. Rail transport The investments to be made will have to lead to visible results in terms of improving operating conditions in passenger and goods transport. Indeed, only increased efficiency in terms of cost, travel time (associated with standard speeds of competitiveness compared with other modes of transport) and reliability can transform the railways into a real alternative to roads and reverse the tendency for rail transport to lose its market share. In particular as regards the transport of goods, “railway freeways” will have to be created and forms of overflow of the corridor referred to identified in accordance with the guidelines laid down for all Member States. A major development of the national transport system will be represented by the decision to go ahead with the Lisbon/Oporto high speed train with a view to its future integration in the European High Speed Railways Network. The opening of this line will represent a departure from the strategy followed hitherto as regards the main corridor of the country. The HST option will have to be justified in particular in the light of its compatibility with investments relating to the modernisation of the conventional line between Lisbon and Oporto, with new objectives having to be set

100

while a viability analysis will be undertaken on the basis of revised estimates. The schedule for the introduction of the HST must be based on planning which will take into account the limitations created by the existence of two parallel infrastructures, in particular in terms of the anticipated development of traffic. Regardless of the decision on the HST, the need for some projects for the modernisation of current lines will remain. Also, the link to the Algarve, the Minho line and the Beira Baixa line will be worked on. The lines which will make the link with Sines must have a capacity which takes into account the future needs of this port as regards the carriage of goods by land, which will have to be specified. On the other hand, the interconnection between the Portuguese south and the Spanish networks will be studied. The European Investment Bank and the European Investment Fund will contribute towards these projects at the same time as the Structural Funds. Maritime transport In the light of the potential offered by the country’s geographical position, maritime transport will have to play a fundamental role, whether in the development of national foreign trade (in particular with the countries of European Union) or in the wider context of world commerce which passes through Portuguese territory. It is accordingly necessary to make significant profits from the performance of the port system, which will allow the market share of maritime transport to be increased and thus reduce the excessive dependence on land corridors. In the context of an overall cohesive strategy for the port sector, based on a clear identification of the function of each of the main Portuguese ports, investment priorities will have to be clearly identified, conditions for a more suitable use of short-journey shipping created and the consolidation of the productivity and competitiveness of the port system ensured. Community action will have to be confined to the completion of the network of road and rail links within and outside port areas, the establishment of platforms for interlinking with other essential modes of transport and the introduction of logistical systems and other systems which are essential for the efficient operation of port infrastructures. In this field, and in relation to investment and the use of infrastructures, public/private partnership must play an important part, fostering participation by the sector which allows the lever effect of Community resources to be maximised. The role of the port of Sines in the Portuguese port system must be specified, with the objective of promoting transshipment and maximising the impact of this port in the development of the surrounding area. Strategic choices are also needed for Lisbon and Setúbal, given the fact that, in the medium term, the latter port will have to contribute decisively towards alleviating congestion in Lisbon.

Reinforcement of the urban system and its competitive capacity through • the complete structuring and interlinking of national territory and its urban system,

through the North/South coastal corridor, the transversal axes (Aveiro/Coimbra/Viseu/Guarda/Vilar Formoso and Lisbon/Évora/ Elvas/ Caia) and the territorial cohesion axes, in particular through the completion of the construction of the entire motorway network and the overhaul of the national railway network, with special emphasis on the North/South link in national territory and on the links to the Spanish network; and

• developing and bringing into operation the intermodal links and logistical facilities,

either in their relationship with port and airport infrastructures or in their relationship with the territory and the urban system.

101

Urban transport The improvement of urban transport in Lisbon will be achieved by expanding the Lisbon Metro, which will secure the link to Santa Apolónia and to Gare do Oriente and the intermodal transport station of the region of Lisbon and the international airport. In the case of the airport, the Metro link will be a real alternative to road access and will considerably reduce the pressure on the roads. This investment will help reduce traffic congestion and will have a favourable effect on the environment. However, the criteria of eligibility for financing from the Cohesion Fund require that the project be considered as an access to a trans-European network should that be the intended solution.

Reinforcement of cohesion and internal solidarity via • the development of the links between the basic infrastructures of the territory and

their international integration and local road networks (and transport), so as to improve territorial integration and the diffusion of the overall improvements in terms of accessibility which are created by those infrastructures; and

• the development, in partnership with the local regions and autarchies, of programmes

to implement infrastructures and bring public transport systems into operation, with a view to the cohesion of the territory, solidarity in the face of risk situations and the improvement of environmental and human quality.

Development of the logistical system aiming at

• the establishment of intermodal interfaces and logistical infrastructures which allow an overall improvement in transport services and the movement of freight associated with the internationalisation of the economy and the performance of functions in the transport systems and peninsular, European and world logistics;

• the establishment of intermodal interfaces and logistical infrastructures which allow

the distribution of goods in metropolitan areas to be rationalised, freeing its interior from heavy vehicle traffic; and

• the establishment of conditions which facilitate growth in the road transport of goods

by undertakings specialising in this service and the concentration of these undertakings and their association with other operators of the logistical chain which allow the appearance of operators in the field of combined road/rail transport and facilitate the participation of Portuguese undertakings in European consortia in the field of combined road/maritime transport, in the context of the future development of short-haul maritime transport on the continent of Europe; and for the consolidation of Portugal’s position in the maritime transport of bulk goods to and from the Iberian Peninsula.

Logistical system The priority given to the development of a national and regional logistical system is a major component of Portugal’s strategy. An initial indication concerning the centres to be established, with appropriate maps, an indicative plan by stages and an estimate of the necessary resources must be integrated in the frame of reference. The contribution of private capital in the establishment of these infrastructures is essential.

102

3.4.2. The transport policy will stimulate the diversification of means of transport and their coordination along multimodal connections. It is still important to set a clear priority in favour of rail transport. In this connection, it may be anticipated that while, in relation to the ERDF, investments in the railway and metropolitan sector represent 75% of the investment in roads, when we refer to the overall projects financed by the ERDF and the Cohesion Fund, on the other hand, the investments in the first two sectors are 30% higher than those in the road sector. 3.4.3. The Community measures in the field of transport will be followed by a set of quantified objectives and indicators which may be seen in the table at the end of this section. It is considered desirable that specialised studies should now be begun which allow indicators of environmental integration to be drawn up in time to be considered in the mid-term evaluation exercise. 3.5. Summary of the Operational Programme Under these conditions, the main objectives of the transport policy for the period 2000-2006, which constitute the priorities of action laid down for the respective operational programme, are as follows:

• to create conditions, in the transport system and respective infrastructures for an increase in the productivity and competitiveness of Portuguese undertakings and for their greater integration in the global market, with priority being accorded to an integrated approach to mobility, whereby the environment and the requirements of town and country planning can be respected;

• to create conditions for the development of a platform of services in Portugal whereby the

role of the country in interlinking long-haul transport between Europe, America, Africa and the Far East can be developed;

• to contribute towards improving the quality of life in urban areas; • to improve accessibility, reflected in a strengthening of internal cohesion and solidarity.

The first objective highlights the role of transport as a necessary condition for economic growth, making possible an increase in the productivity and competitiveness of undertakings and utilising intermodality as a basic condition for the rationalisation of the transport system; it additionally highlights the minimisation of environmental externalities, and this will stem in particular from the promotion of suitable modal options and proposes, finally, the development of the transport system in a manner interlinked with town and country planning. The second objective lays down the direction of the specialisation of the national area as a hub in passenger and goods traffic between Europe and the rest of the world, assuming the development of platforms of suitable logistical activities takes place. The third objective seeks to combat degradation and promote the quality of life in urban centres, especially metropolitan areas, such quality being related to the increase in journey times in travel from, to and within towns. The last objective addresses the question of mobility and the accessibility of “interior regions” which are remote from the major transport routes, enhancing their importance for economic development, national cohesion and social solidarity.

103

OPERATIONAL MEASURE FOR ACCESSIBILITY AND TRANSPORT In the above context, this programme covers two aspects: • Improving the quality and efficiency of the transport corridors structuring the Portuguese

economy, an objective which concerns the establishment of more efficient mobility in relation to the rest of Europe via the development of the major multimodal transport corridors which structure the Portuguese area and link it to the European area through measures aimed at establishing a hub linking Europe with America, Africa and the Far East, in terms of the new European centrality, and by the establishment of a structured and cohesive network of platforms of logistical activities.

• Stengthening national cohesion and promoting sustainable mobility in line with

strengthening internal cohesion, in particular through the improvement of links among medium-sized towns and the structuring national network, and also improving access from rural areas to urban areas; it also covers the improvement of safety conditions in the various modes of transport and of quality in the provision of transport services.

The measures of the operational programme will have to be organised by modes, systems, corridors and nodes.

10

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4. ENVIRONMENT In line with the Fifth Programme for Environmental Action, sustainability is reflected in a continuous strategy of economic and social development which does not harm the environment or the natural resources on whose quality the continuity of human activity and development depends. In this context, the strategy followed in the Community Support Framework aims to create the conditions for the sustainability of the economic development of the country, with constant concern to promote a quality environment. To achieve this objective, the integration of the environmental dimension in all action sectors is a priority. The integration of environmental concerns in the sectors of economic and social activity will only be possible through the participation of all the sectors of society in a spirit of shared responsibility. The environment does not have to be regarded as an obstacle so much as an opportunity for development. The operational measures of this Community Support Framework will apply the principles of precaution and preventive action, of correction (with priority being given to the source of damage to the environment) and of the application of the “polluter pays” principle as well as the application of Community rules in relation to environmental matters. Thus these measures will lay down the provisions intended to integrate the environmental dimension in intervention and its consistency with the environmental objectives laid down in national environmental policy. The operational measures will be implemented, whenever possible, through the establishment of strategic partnerships involving the public and private sector in order to achieve sustained development. Objectives One of the objectives of the development of Portugal for the period 2000-2006 consists of the improvement of the quality of life of the population which entails, particularly in the environment sector, providing basic sanitation infrastructures, a rational management of natural resources and suitable town and country planning management. Despite the major effort made in the second Community Support Framework as regards basic sanitation, gaps and inadequacies still persist which are reflected in assistance figures below Community averages. In fact, some significant divergences between the planned objectives and the results actually obtained were recorded. As an example, the quantified objective in relation to the percentage of the population served by the waste water collection system was 90% for 1999 and the result achieved was 75%. Similarly, the objective in relation to installed waste water treatment capacity, which was set at 99% for 1999, only achieved 70%. Thus a major effort will be carried out during the period 2000-2006 to achieve the objectives set. The quantified objectives of the Community Support Framework may be seen in the summary table. In addition to these objectives, the Community Support Framework will have as its impact an 80% reduction in the burden of water pollution. The investment amount necessary to achieve these objectives is estimated at EUR 5 641 million.

107

The Community Support Framework provides for a sum of EUR 1 253 million from the ERDF corresponding to an investment of EUR 1 733 million for supply, basic sanitation and nature conservation (environment sectoral programme + regional programmes). The Cohesion Fund will contribute, also indicatively, EUR 1 580 million, with the investment associated with this co-financing rising to about EUR 3 911 million. The CSF 2000-2006 lays down that the investments to make sectoral activities (health, agriculture and economy) compatible with national and Community environmental policy and legislation are supported by sectoral measures. The necessary sums for these investments are estimated at EUR 2 790 million. The Community Support Framework provides for EUR 1 750 million. Priority areas of action in the environment The priority areas of action in the environment sector are:

1 - water supply 2 - waste water treatment 3 - waste treatment

As for the investments to be carried out in connection with water resources are concerned, the strategic principles to be followed will be:

• integrated management of water resources by basin according to the provisions of the framework Directive on water currently being approved.

• implementation of complete functional systems, paying special attention to the completion

of existing water supply systems. In principle, the Cohesion Fund will, as a matter of priority, finance the part of the systems upstream of water supply and downstream of waste water drainage systems. As for waste water treatment, the investments to be made will take into account two aspects in particular:

• the schedule of implementation of Directive 91/271 on the treatment of urban waste water.

• the implementation of waste water collection and treatment systems which guarantees a suitable level of treatment and also the re-use of water treated for specific purposes. The completion of the current systems is a priority.

In relation to the investments to be made in connection with solid urban waste, the strategy of the Community Support Framework is in line with the following guidelines:

• the completion of the systems for the collection and treatment of solid urban waste across the country.

• promotion of selective collection and the creation of awareness among the population.

108

For these three priority areas of action in this sphere, the following are taken into account: • economies of scale: whenever possible, multi-municipal or inter-municipal integrated systems

will be used; • the drawing up of management models which offer technical and financial guarantees and which

ensure sustainability and guarantee the operability of the solutions found; • the “polluter pays” principle: setting of objectives in terms of coverage by charges for

exploitation and maintenance costs and for an increasing proportion of the investment cost; • adapting the scale of the systems to demand (actual needs), bearing in mind the measures

necessary to reduce losses; • consolidation of the partnership between the public and private sector and the systematic search

for the maximum lever effect of Community financing; • complementarity between investments financed by the ERDF and the Cohesion Fund with a

view to coordinating and maximising the synergy of the aids obtained in the environment sector. Thus in the case of the three priority sectors, a frame of reference will be drawn up before the formal approval of the environment operational programme and regional programmes. This document will be of an indicative nature and will contain the following data in particular: • a summary of the quantified objectives to be achieved in the period 2000-2006 in the three

priority spheres of environmental infrastructures; • an explanation of the strategy laid down with a view to achieving the objectives laid down; • the drafting of the measures laid down by basin with the support of appropriate cartography.

These measures must be orientated towards implementing integrated systems of water management and also towards complete systems for the collection, treatment and effective utilisation of waste. The segments which are lacking to complete the systems will have to be identified;

• an estimate of the necessary investments (by system and basin); • an indication of the major projects for which feasibility analyses are in progress; • sources of financing, with an indication of the criteria for division between the ERDF and the

Cohesion Fund; • provision for any EIB loans; • the planned mobilisation of private capital for the financing of these infrastructures; • seeking the maximisation of the lever effect; • arrangements for the application of the “polluter pays” principle; • planned arrangements for coordination in the case of projects with a trans-border element.

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One other priority field of action is biodiversity and nature conservation, which in the Community Framework 2000-2006 is of a transversal nature and interacts with the policies for the use of natural resources and land use planning and also as a support for a process of sustainable development. Along these lines, priority will be given to the proper implementation of the “Birds” Directive (79/409/EEC) and the “Habitats” Directive (92/43/EEC), and especially to the protection of natural species and habitats of Community interest and the appropriate management of the areas integrated in the Natura 2000 network by drawing up management plans and active conservation measures. Environment operational programme The Environment Operational Programme, pursuing the general objectives laid down by the Community Support Framework reaffirms, via its objectives, its contribution towards the restoration, effective utilisation and promotion of the environmental resources of continental Portugal, in monitoring the state of the environment and in consolidating the integration of environmental protection in economic and social activities. The environment operational measure combines two components, one being national in scope and integrated in Priority 3 and the other decentralised in scope and regionally integrated in the Operational Programmes of Priority 4. The national operational measure is developed in line with two main priorities: • the sustainable management of natural resources • the integration of the environment in economic and social activities The priority “sustainable management of natural resources” has as its objective: • to improve the management of protected species and habitats. • support for infrastructures supporting nature tourism, interpretation, information and assistance

for visitors. • to support local development in protected areas. • to protect and restore the coastal strip in accordance with Plans for the Development of the

Coastal Fringe • rehabilitation and the effective utilisation of the National Hydrographic Lagoon Network. The priority “integration of the environment in economic and social activities” has as its objective: • the improvement of the urban environment by reducing levels of pollution, restoring and

rehabilitating degraded areas, etc. • support for the sustainability of economic activities by promoting eco-management and

environmental certification, support for innovative and demonstration measures which secure improvements in environmental performance, measures for environmental restoration and to step up measures securing environmental added value, in relation to the regulations in force.

11

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111

E – PRIORITY 4 – PROMOTING SUSTAINABLE REGIONAL DEVELOPMENT AND NATIONAL COHESION

1. GENERAL FRAMEWORK 1.1 Support from the Structural Funds, which is materially expressed in Community Support Frameworks I and II and the national public policies pursued in the same period, was an essential factor which allowed improved availability of infrastructures and collective equipment to be achieved in continental Portugal, the Azores and Madeira. However, significant differences still remain among the various regions and sub-regions of the country in living conditions, in the density and efficiency of the economic fabric and in the capacity to offer employment. Indeed, the regional economic basis shows, especially in inland areas, weaknesses which make it vulnerable to the foreseeable development of the European and world economies through greater competition and liberalisation of trade (globalisation, completion of the internal market, enlargement, etc.). 1.2. The Portuguese population continues to be heavily concentrated on the coast: three million Portuguese live in Greater Lisbon and Greater Oporto. At the same time, the location of the most dynamic economic activities tends to follow this trend. It conforms to a market logic which leads to a demand for greater efficiency in the conditions of activity and in factors of organisation, reflected in greater ease of access to factors of production and internal and international markets and in the existence of an extensive and flexible range of services to undertakings. It must, however, be pointed out that, in the period under review, for example, an expansion was seen of the urban centres of Évora and Viseu, based predominantly on the development of commerce and services, and a consolidation of the fabric of production in Beira Interior; and that, in both cases, this development was facilitated by the development of major axes of communication between the coastal strip and inland. 1.3. Taking into consideration the NUTS II regions of the country, the following may be highlighted as the main aspects of regional diversification:

• regions with a high population density, like North and LVT or Lisboa e Vale do Tejo (in particular the areas of Greater Lisbon and Greater Oporto) contrast with rather less dense areas and, in some of them, in a marked loss of population, as in Alentejo;

• human resources show fairly differentiated age characteristics, with North being the region

with the youngest population in continental Portugal (although at NUTS III level, differentiated intra-regional situations may be seen);

• Alentejo region had, in 1995, the highest ageing index, with 137 elderly persons over 65 for

every 100 young people below the age of 15; • in terms of the sectoral distribution of GVA in each region, the regions of North, Lisboa e

Vale do Tejo and Algarve have a primary sector which is below the average for the country. It is in Alentejo that the primary sector diverges more from the national average (13.4% of regional GVA);

• North and Centre are regions where the secondary sector makes the greatest contribution

towards regional GVA and Algarve is the region with the least participation of the secondary sector in total GVA (13.8%);

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• in the regions of Lisboa e Vale do Tejo and Algarve, the importance of the tertiary sector is rather higher than in other regions;

• in terms of the production capacity of each region, evaluated by per capita GDP, the region

of Lisboa e Vale do Tejo stands out clearly, while the region of Algarve also shows a figure above the average for the country. The Autonomous Region of the Azores has the lowest GDP per capita in the entire NUTS II.

1.4. Progress in accessibility has significantly shortened distances in continental Portugal and this, together with the improvement in the provision of social amenities already referred to, contributed towards stimulating progress in inland regions. The advantages obtained in North region and Alentejo ought thus to be noted, while in Centre region improvement in accessibility took place at a lower rate; similarly, reference may further be made to the major progress in the Autonomous Region of Madeira in terms of internal and international communications. However, to a minor extent throughout the country, critical areas in terms of living conditions, employability and unemployment persist. On the other hand, the existing inadequacies as regards the international accessibility of national territory are a significant obstacle to exploiting the advantages offered by European economic integration, with more marked consequences in relatively more backward regions. The qualification of human resources, too, must constitute - mainly at regional level - a priority element of a policy of equilibrium between the coast and inland. The interior of the country does not have qualified human resources which allow a continued process of growth of the product to be pursued. This situation does not depend only on the existence of suitable education and training facilities, the regional availability of which has, as stated, made major progress, but on the creation of conditions which stimulate or allow the settlement of populations through the development of towns or urban centres which offer suitable living conditions and real economic opportunities to their residents. A regional development policy must still take into account the fact that the availability of water in sufficient quantity and quality poses a problem with structural characteristics for Portugal. This consideration makes it possible to base the assignment of clear priority to the management of the integrated cycle for water in water basins, whose vulnerability is marked by strong peninsular dependence and considerable regional disparities, so that there is a need to invest heavily in hydraulic infrastructures in a joint Iberian context. 1.5. The integration of the ultra-peripheral regions of the Azores and Madeira in European and world markets is an imperative in terms of economic and social cohesion, although it entails enormous effort with a view to creating transport and logistical infrastructures which lessen the disadvantages resulting from territorial non-contiguity and the development of economic activities which are not only internally and internationally competitive but also consistent with specific regional features, in other words, based on goods and services which are little affected by distance and are of a high intrinsic value. In the Azores in particular, given their characteristics of an archipelago extending over 600 km of ocean, there must be investment in the modernisation of internal transport infrastructures which allow the regional market to be integrated and territorial imbalances to be attenuated. 1.6. In any event, it should be pointed out that the regional programmes of continental Portugal and of the Autonomous Regions integrate fully in the essential objective of the third CSF, taken as a whole, namely to help find a remedy for the structural backwardness of the country in the space of one generation, mainly by increasing the productivity of factors of production. With this in view, contradiction with sectoral measures does not have to exist so much as complementarity. For this very reason - mainly in relation to regionally decentralised measures of central government - precise criteria are laid down for the allocation of competences aimed at guaranteeing the priority consideration of sectoral aspects in the selection of projects.

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1.7. The Structural Fund action under the programmes incorporating the third CSF, Priority 4, will be monitored by a synthetis indicator which allows the living conditions of the population to be assessed in an integrated way and the limitations inherent in using only GDP per capita as the sole indicator of convergence and cohesion to be overcome. This index is the composite index of human development which measures, with equal intensity, four variables related to conditions of health, level of education and conditions of comfort and income of the population (cf. the corresponding table at the end of this chapter). 2. REGIONAL PROGRAMMES 2.1. REGIONAL MEASURES OF CONTINENTAL PORTUGAL 2.1.1. General Aspects Continental Portugal’s Regional Operational Programmes are undergoing very significant innovations in this programming period in relation to both the institutional model adopted in the two previous CSFs and to the volume of financial resources allocated to them. This conception reflects a clear guidance and organisational policy integrated in a general movement whose main objective is to guarantee, for the application of the principle of subsidiarity and in view of the increasing complexity of the institutional forms of state territorial administration, gains in efficiency resulting from a greater alignment of the different levels of administrative and political decision and civil society, from clear coordination between the various public administration services and departments and a strong interlinking of central administration measures with towns on the one hand and with representative organisations of economic and social agents on the other. The changes referred to can firstly be seen in the new arrangements applying to regional operational measures which, in addition to the component relating to support for investments of municipal and inter-municipal interest, also integrate two other types of schemes and measures corresponding to two distinct main priorities: integrated measures with a territorial basis and measures of the regionally decentralised central administration. Secondly, such modifications entail a major increase in the Community and national financial resources distributed via regional programmes. Indeed, regional programmes account, in the third CSF, for 38% of the total investment corresponding to the intervention of the Structural Funds and 47% of the direct contributions from these Funds. 2.1.1.1. Support for investments of municipal and inter-municipal interest (Priority I) The primary component of continental Portugal’s regional programmes, including the support for investments of municipal and inter-municipal interest present in all of them as an autonomous priority, basically corresponds to measures of the type financed by the regional operational measures of CSF II and seeks to ensure the continuity of involvement by Portuguese towns in the effort relating to the country’s economic and social development, allowing them access to corresponding Community financing. Bearing in mind the powers and competences of those local autarchies, the projects supported will essentially be concentrated in three main spheres: transport, environment and urban renewal

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Table 1

Human development in Portugal - 1997

Region Composite human development index

Life expectancy

Index

Literacy index

(15 yrs. & over) Comfort

index Index of per capita GDP

North 79.7 84.2 92.2 93.7 48.9

Centre 78.8 86.0 88.3 93.3 47.4

L.V. Tejo 86.8 85.6 93.5 97.4 70.9

Alentejo 76.0 86.2 80.5 91.5 45.8

Algarve 80.3 83.0 89.4 93.1 55.6

A.R. Azores 78.0 82.8 93.1 96.9 39.3

A.R. Madeira 76.4 82.7 87.7 93.9 41.4

Portugal 81.6 84.9 91.1 94.7 55.6

Dispersion index 0.046 0.019 0.050 0.023 0.213

Component Deficit Maximum value

Life expectancy 15.1 85 years = 100 (United Nations)

Literacy 8.9 All the adult population can read and write = 100

Comfort 5.3 All the population has running water, electricity and sanitary installations = 100

GDP per capita 44.4 Higher per capita GDP in towns at constant prices in 1997 = 100

Total 18.4

Table 2

Composite human development index

Region 1970 1981 1991 1997

Norte 54.1 68.5 76.3 79.7

Centro 51.6 65.6 74.4 78.8

Lisboa e Vale do Tejo 66.5 75.1 84.3 86.8

Alentejo 46.4 60.3 72.3 76.0

Algarve 48.2 64.5 77.6 80.3

A.R. Azores 53.7 68.0 75.2 78.0

A.R. Madeira 50.1 65.0 73.3 76.4

Portugal 56.1 69.4 78.3 81.6

Dispersion index 0.127 0.068 0.053 0.046

Source: DPP

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The Community contribution towards measures of this type is greater than that granted for the same purposes under CSF II, and this will allow a clear priority to be assigned to investments of greater territorial scale and financial importance (generally proposed by associations of towns) with the objective of increasing the respective effects and overall impact in the region in question. The possibility of modifying the rates of financing in accordance with the characteristics of the projects to be financed, according to criteria to be laid down in the programmes or programme complements will contribute further towards this objective. In the management of this Priority, priority will be given, as far as possible and in accordance with the rules for the sound financial management of the Structural Funds, to recourse to contractual forms which ensure involvement on the part of associations of towns on a regional and sub-regional basis. With the objective of ensuring the availability of the financial resources needed for the implementation of municipal investments in good time, this priority incorporates, in all the regional programmes, an overall subsidy for the support of municipal investment intended to finance subsidised interest rates on long-term loans granted by financial institutions to town halls for the development of projects financed under the third CSF. In relation to the development of human resources, this priority further includes support for measures to train local government employees and agents alongside central government staff, to be carried out in the regional operational programme of Lisboa e Vale do Tejo and in the sectoral programme for employment, training and social development programme in the case of the other regions of continental Portugal. 2.1.1.2. Integrated measures with a territorial basis (Priority II) Under this Priority, integrated measures will be financed via a concentration of investments and organisational capacities to remedy particularly marked development difficulties or use insufficiently utilised opportunities to advantage resulting, in either case, from features specific to each Portuguese region. These measures are of two types: integrated measures for urban development and integrated measures for regional development. During the period of implementation of the third CSF, they will be able to undergo significant developments, both as regards the spheres of intervention and selected territorial areas and as regards sources of financing and the sums of investment and Community support allocated to them. In this context, local and regional development measures merit special attention, as do measures for economic and social development in a rural environment, especially with a view to diversifying economic activities, promoting the creation of employment outside agriculture, improving the supply of infrastructures and services, preserving the landscape and improving environmental conditions (for example, through measures for environmental enhancement). At the same time, two forms of measure in line with the general objective of the development of the system of towns with a view to correcting regional imbalances and, primarily, to aligning the coast and inland areas are still prominent: measures for the improvement and competitiveness of towns and measures for metropolitan enhancement. The intention, via both measures, is to ease the pressure on the metropolitan areas of Lisbon and Oporto resulting from the abandonment and desertification of the least-favoured rural environments, either through the establishment of regional centres of attraction (medium-sized or intermediate cities) or the improvement of living conditions, urban reorganisation and action on the municipal environment of the two major cities in the country. Both in the case of local development and support for urban enhancement strategies, it should be noted that the complexity inherent in pursuing objectives linked to integrated measures with a territorial basis, the diversity of responsibilities of the institutions involved and their relative dispersion, the need for measures to match the specific characteristics of the areas covered and the establishment of partnerships between public and private agents require suitable consideration of the aspects associated with the definition, implementation, management, monitoring and assessment of these measures as a condition for the success of these measures.

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LOCAL DEVELOPMENT One of the innovative aspects of the present third CSF relates to the treatment applied to aspects associated with local development as an essential means of reducing regional imbalances and disparities, especially through the importance assigned in it to towns as the driving force in restoring equilibrium and in the territorial restructuring of the country. Measures to support local development are generally spread across the operational programmes which constitute the third CSF but take on a special significance and importance in regional programmes and in the Employment, Training and Social Development and Economy programmes. These measures cover a vast spectrum of fields of action which are specific to territorial policy: transport, education and training, services to undertakings, social economy, heritage conservation, regional culture and identity, tourism, environment, rural development, etc.). Given the characteristics specific to local development measures, and especially the need for intense involvement by regional or local players in determining, implementing and monitoring them, the type of measure provided for under integrated measures with a territorial basis of Priority 2 of the regional programmes is especially well fitted for promoting and developing it. Particular attention must be paid to the partnership between the public and private sectors (with the deep involvement of towns and associations of towns, NGOs, undertakings and associations of undertakings, workers’ organisations, etc.), this being an indispensable condition for the success of initiatives of this kind. In this context, a call may be made on the skills of local development players who already have field experience, like those currently subscribing to partnerships in the context of LEADER Groups and Territorial Employment Agreements or else BICs.3 In particular, as regards measures in favour of undertakings (SMUs and micro-undertakings), specific systems for listening to, and supporting, local entrepreneurs which both allow initiatives to create local employment, through the operation of social economy mechanisms, to be supported and innovative projects for internationalisation and technology transfer to be promoted with a view to consolidating competitiveness and excellency at regional level, need to be developed. A strategy of this type presupposes: • The drawing up of a system of incentives appropriate to the needs of SMUs and micro-

undertakings which is accessible to the entrepreneur, decentralised and simple in conception and in the mechanisms of its implementation;

• The existence, at regional level, of a diverse range of services to undertakings and of

intermediate establishments (for example, associations of entrepreneurs) with suitable skills, particularly when it comes to innovation; and the promotion of a pro-active role on the part of existing intermediate establishments (like the IAPMEIs – Institutes for the Support of Small and Medium-sized Industrial Undertakings), whereby undertakings can be made aware of those technological spheres of major economic interest;

• The consolidation of structures for technical support to undertakings and the

establishment of “one-stop shops”; • The use of “technical assistance” to promote measures for informing entrepreneurs,

particularly at regional level, and for supporting the preparation of applications and following up projects of micro-undertakings, allowing these access to sources of financing provided for in the third CSF.

3 Possibly Business and Innovation Centres – Translator.

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2.1.1.3. Regionally decentralised central government measures (Priority III) The objectives of the Priority relating to regionally decentralised central government measures reflect the general strategic priorities of the third CSF, albeit planned and implemented in a regionally differentiated way, through the transfer to the regional programmes of a set of investments and measures which have been part of sectoral measures. In this way, a greater level of integration of policies and instruments to support development and, in particular, an improved interlinking of the measures of the different institutional levels of public administration and between these and the private sector are sought. In addition, the aim is to increase the efficiency of public policies and at the same time modernise administration and face the institutional challenges arising from the country’s development in recent years. The regional programmes of continental Portugal thus incorporate a Priority III which covers measures in the following areas: Education, Employment, Training and Social Development, Science, Technology and Innovation, Information Society, Health, Culture, Sport, Agriculture and Rural Development, Fisheries, Accessibility and Transport and Environment. In each of these spheres, the actual implementation of the guidelines relating to decentralisation was carried out according to criteria specific to the sector concerned, although the following general principles have been considered at the same time:

• Adaptation to regional diversity; • Consideration of actual capacities (skills, availability of human and material resources) of

decentralised services; • Cohesion between decentralised measures and sectoral strategies nationally; • Efficiency of management.

The management arrangements in connection with this priority of regional programmes deserved particular attention from the national authorities and the European Commission and are the subject of detailed specific rules in the appropriate chapters of the present CSF. The rules laid down are in line with the need to allocate a precise apportionment of competences between the levels of national and regional measure, guarantee the prominence of sectoral criteria in the selection of projects financed and ensure the combined follow-up of national and regional measures, with a view to their contribution towards compliance with the quantified objectives laid down globally for each sector considered. The regional decentralisation criteria in respect of sectoral measures and the contents covered by regional programmes in relation to each sector of action are set out below. Education The criterion which determined the choice of the measures to be centralised in the education sector is based on the identification of the fields of competence of the Regional Directorates of Education. These Regional Directorates have existed since 1990 and recently acquired jurisdiction in relation to handling investments in infrastructures. After the publication of Decree-Law No 71/99 of 12 March 1999, they further became responsible for professional education within the respective area of action. Bearing in mind the past experience of these Regional Directorates in relation to the infrastructures of pre-school, primary and secondary education, the choice was made to decentralise investments in these spheres totally. On the other hand, mindful that the respective competences in the sphere of professional education were only assigned to them from 1999, the option of cautious and gradual decentralisation to the tune of 50% on average of the investments in the period 2000-2006 was taken so as to ensure involvement by regional partners when considering the relevance in training

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terms of existing professional courses or those to be created and of the conditions of employability associated with them. On the other hand, as this sub-sector is in a transition phase as far as the nature of schools is concerned, it is advisable to keep the management of a significant part of the financial resources allocated to professional courses at a central level in such a way as to allow, if necessary, the redistribution of such resources by different regions. Employment, Training and Social Development In this sphere, the decentralisation model followed was mainly guided by criteria linked to the nature and scope of the measures financed. The overall measures and schemes which will integrate the decentralised measures of central government regionally under continental Portugal’s regional programmes are as follows:

• the reinstatement and occupational integration of the unemployed; • support for local organisations for the development of employment; • support for investment in local initiatives creating employment; and • support for the creation of employment in local initiatives.

Under the “phasing out” system, the region of Lisboa e Vale do Tejo deals independently with the entire set of measures provided for in the area of employment, training and social development. Thus the operational programme of the region of Lisboa e Vale do Tejo also includes, in addition to including the measures already referred to which regionally integrate the decentralised measures of central government under other regional programmes of continental Portugal, the measures under the national sectoral programme. As regards public administration training, the measures for training central government bodies will be pursued via the sectoral programme, while the measures for training local government bodies will be implemented via the regional programmes. Science, Technology and Innovation Continental Portugal’s decentralised component of the regional programmes in the field of science, technology and innovation, equates to the development of measures relating to scientific and technological culture, especially the establishment of district Living Science Centres. For these interactive areas of scientific and technological popularisation, the aim is to guarantee, through the partnerships established case by case and involving local players (for example, town halls), higher education establishments, associations of businesses and other decentralised public administration bodies, the appropriate mobilisation of human and material resources actually existing in connection with science and technology in the regions covered. Information society The component represented by the establishment and development of Digital Towns under the Digital Portugal Programme is decentralised in a strategy for the interlinking and mobilisation of existing human and material resources at local level. This strategy is integrated in the extension of the experiment recently started involving the creation of Digital Towns or Regions on the basis of partnerships constituted locally between public bodies of central and local government, schools, universities, private bodies, cultural associations and development associations. Health Regionally decentralised action in the field of health is confined to drawing up and developing the Local Health Systems (LHSs). These systems are collections of interlinked health resources organised according to a geographical/population criterion, established both in urban and rural areas, designed on the basis of the needs defined in terms of risk to a community, which is responsible for the care to be given to individuals, families and social groups. They are made up of combinations of health centres, hospitals and private institutions, both profitmaking and not-for-profit, non-governmental organisations and Community institutions acting in the field of health and existing in the respective geographical area, including, moreover, a Public Health Unit. They are developing against a background of complementarity and coordination of resources and integral

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exploitation of existing or necessary capacities, requiring management which is attentive to local characteristics and special features. This decision takes into account the past experience of the Ministry of Health as regards the decentralisation of skills, which was recently strengthened by the establishment of the LHSs. In relation to the nature of the measures financed at regional level in the field of health, reference may primarily be made to the construction, remodelling and equipping of local health centres and hospitals, the development of day hospitals and continuing care hospitals, the transport of the sick and the introduction of arrangements to be applied in the pre-hospital phase, plus support for local infrastructures for health promotion and training. Culture The regionally decentralised component of measures in the culture sector is aimed at supporting projects for the recovery of property of value in heritage terms and is made up of smaller projects than those supported by the corresponding sectoral measure, with regional planning and impact. The sectoral programme, for its part, will support larger projects of national and international scope and importance which are concentrated in property and premises under the responsibility of the central services of the Ministry of Culture. Decentralised cultural measures seek to establish partnerships with regional bodies, like local autarchies, or with private associations and other public and private bodies, in particular bodies which own property and premises which are covered (such as the church authorities). The intention is to stimulate active participation on the part of regional bodies in drawing up investment priorities in the culture sector, with a view to achieving greater effectiveness and efficiency in the allocation of available resources. Sport All measures relating to the field of sport are regionally decentralised. The intention is mainly to ensure regional provision with sports equipment with a view to partnership between central government, town halls and sports associations. Agriculture and rural development The Agriculture and Rural Development component integrated in continental Portugal’s regional programmes complements the sectoral programme, contributing towards the same objectives in an interlinked and cohesive way but giving priority to an approach involving the territorial integration of agricultural and rural development policies. In regulatory terms, the measures provided for are essentially part of Article 33 of Regulation 1257/99, which concerns promoting the adaptation and development of rural areas and is secondary to the support granted under the other articles and also, in some cases, to ERDF financing. The measures in question are differentiated in importance in accordance with specific rural development strategies laid down at regional, sub-regional or local level and which are mainly aimed at improving production efficiency, on a par with the creation of favourable conditions for the viability and competitiveness of the sector. Fisheries The regionally decentralised measures which will be financed by the FIFG concern collective infrastructures to support the development of aquaculture and quality products. The type of project to be supported leads one to think that more efficient results could be achieved if regional logics and those of participation by the main recipients were complied with. Under the ERDF, infrastructure projects in fishing ports by way of the support measure for structures which favour the competitiveness of the sector will still be financed. Economy The regionally decentralised measures in the economy sector have an impact on situations in relation to which local determinants and interfaces must prevail over central policies and strategies and, at the same time, situation disgnostics and suitable instruments of action exist and it was possible to specify a suitable financial package beforehand with some degree of certainty. Thus, as a rule, systems of incentives in which decisions on location or a change of location are the responsibility of undertakings are excluded from decentralisation and therefore lie outside the administration. However, regional integrated tourist programmes, underpinned by the development of a strategy in which concerns regarding effective utilisation and rehabilitation are important aspects, are exceptions. The following measures to be pursued, either in connection with the

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promotion of strategic development areas or the improvement of the business environment, thus incorporate the decentralised component in the field of economy:

• projects relating to the establishment, development or effective utilisation of business location areas;

• projects relating to the extension and consolidation of the network of supply markets; • regionally-based integrated tourist projects of a structuring nature; • projects for the expansion and effective utilisation of the national youth tourism network; • projects for the environmental recovery of abandoned mining areas and for industrial

organisation and environmental reinstatement of the extraction industry; • projects relating to the establishment or modernisation and consolidation of interface and

business assistance institutions; • investment projects relating to the establishment and modernisation of the laboratories of

institutions incorporated in the Portuguese Quality System; • the construction and installation of an underground natural gas store, the construction of a

natural gas regasification terminal, projects for the expansion of the area of current networks for the distribution of natural gas and projects for the conversion of consumption to natural gas.

Accessibility and Transport The projects integrated in Type B and C ports will form part of the regionally decentralised component (within the meaning of the proposal of Council document No 9389/99 of 28.6.99) and also other railway projects (like the Metro systems) and, further, national and regional roads. Environment Due to the varied nature of the measures under the Environment programme, differentiated criteria for the allocation of competences between the national context and the regionally decentralised component have to be used. Thus, as regards the conservation and appreciation of natural heritage, measures within regional programmes and having a geographical impact in areas contained in the National List of Sites, in Special Protection Zones, areas with protection status which are considered in International Conventions, areas with European Diploma status, Biosphere Reserves or Biogenetic Reserves and areas of importance for nature conservation, are supported. The regionally decentralised measures for the effective utilisation and protection of natural resources concern small local projects for the environmental reinstatement of the coastal strip and, as regards the measures for environmental information, training and management, this component will include especially structures for monitoring in all spheres as well as systems for the treatment and processing of regional and local data and regional laboratory equipment. Finally, as regards infrastructure for the improvement of environmental quality, the regional programmes concentrate their efforts on financing integrated projects in the field of the improvement of the urban environment which are not included in the different national programmes.

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Table 3

Sectoral Impact of Regional Decentralisation

Total Investment 2000-06 - Structural Funds

(EUR ‘000 – Current prices)

National Regional Total %

Measures measures

Education 1 665 328 676 725 2 342 053 28.9%

Employment, training and social development 2 821 862 1 573 608 4 395 470 35.8%

Sience, technology and innovation 956 735 29 945 986 680 3.0%

Information society 625 035 163 675 788 710 20.8%

Health 698 318 322 538 1 020 856 31.6%

Culture 327 467 33 273 360 740 9.2%

Sport 0 237 532 237 532 100.0%

Agriculture and rural development 3 366 552 1 364 561 4 731 113 28.8%

Fisheries 364 997 64 895 429 892 15.1%

Economy 9 378 011 1 231 145 10 609 156 11.6%

Acessibility and transport 3 368 477 2 291 276 5 659 753 40.5%

Environment 456 017 209 613 665 630 31.5%

Table 4

Sectoral Impact of Regional Decentralisation

Community financing 2000-06 – Structural Funds

(EUR ‘000 – Current prices)

National Regional Total %

Measures measures

Education 1 167 417 426 214 1 593 631 26.7%

Employment, training and social development 1 606 174 887 637 2 493 811 35.6%

Sience, technology and innovation 464 144 14 972 479 116 3.1%

Information society 316 239 100 290 416 529 24.1%

Health 475 574 241 904 717 478 33.7%

Culture 237 278 24 954 262 232 9.5%

Sport 0 148 446 148 446 100.0%

Agriculture and rural development 1 221 505 682 047 1 903 552 35.8%

Fisheries 177 922 46 666 224 588 20.8%

Economy 2 732 154 557 549 3 289 703 16.9%

Acessibility and transport 1 388 385 1 052 231 2 440 616 43.1%

Environment 332 656 157 210 489 866 32.1%

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2.1.2. Operational measures of continental Portugal 2.1.2.1. North The North region has a total population of 3 561 620, corresponding to 35.8% of the national total, distributed over an area totalling 21 300 km2, giving a population density of 167 inhab./km2. However, there are very marked differences in the distribution of the population among the different sub-regions, with a maximum and minimum in Greater Oporto (1 462 inhab./km2) and in Alto Trás-os-Montes (28 inhab./km2) respectively. Moreover, as well as this difference in the structure of the population, there are others, of an economic and social nature, which contribute towards emphasising the division between the metropolitan region of Oporto (made up of Greater Oporto and the so-called diffuse industrial conurbation which surrounds it in a radius measuring some 60 km) and a sub-region inland with predominantly agricultural characteristics and medium-sized towns which are not large enough. In the metropolitan region, further features to be pointed out are the youth of the population, the dynamism and the industrial capacity, in addition to the good general accessibility to international routes. The main challenge in the period covered by the third CSF is structuring a town which is the main entry point to an economically vigorous area, with special attention being paid to the coordination and intermodality of modes of transport, to investment in a system of basic sanitation “upstream” and to the correction of situations of marginality and social exclusion (in the centre of Oporto and some residential districts). In inland areas, by contrast, the population is ageing and a marked lack of skills and business dynamism and innovation are to be seen. It will be important to develop existing urban centres in such a way as to transform them into centres of equilibrium capable of activating surrounding agricultural areas which are of high quality in environmental and landscape terms. Under these conditions, the main objectives of the development of the North region for the period 2000-06 which constitute the priorities of the respective regional operational programme are as follows: • Improvement of skills among the population and increase in employability The region still has a

high average population of young people who must be offered suitable schooling, and training which facilitates their occupational integration. On the other hand, the shortcomings of the adult population in terms of skills is one of the main constraints on the economic development of the region to be encountered.

• Effective utilisation of business capacity the aim being, via measures to strengthen the

competitiveness and internationalisation of regional undertakings, to improve the efficiency of the current areas of industrial specialisation and develop new activities, with the consolidation of the “chain of value”, and to contribute towards the settlement of populations and economic activities in the more backward areas inland;

• Equilibrium of the urban system via the organisation and enhancement of the metropolitan area

and the development of a policy to support towns and urban priorities (this objective will be pursued by integrated urban development measures to be included in Priority 2 of the regional programme);

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• Improvement of external and internal accessibility by ensuring that intra-regional and local accessibility are improved as a back-up to national and European policies and support programmes and assuming major investment in the different types of link with Europe (roads, railways and maritime and air transport) and in their intermodality;

• Enhancement of the urban and natural environment, given the fact that the region still shows

particularly low levels of service in terms of the public networks for basic sanitation, especially in the more industrialised areas and, on the other hand, incorporates extensive protected areas which lack suitable management which utilises them effectively as development resources.

• Modernisation of the institutional support framework for development through support for

developing the skills of the institutional players in regional and local development and through promotion of their diversity.

2.1.2.2. Centre The Centre region has a total population of 1 710 390 inhabitants, corresponding to 17.2% of the national total, distributed over an area totalling 23 700 km2, giving a population density of 72 inhab./km2. It is based on a population model in which eight towns are prominent, the main one of which – Coimbra - is the third city of the country. Indeed, one of the main characteristics of the Centre region is the absence of large towns; its spatial organisation is marked by the existence of a set of eight urban systems very close to each other and concentrating within them 75% of the population of the whole region, although none of them, individually, has more than 150 000 inhabitants. There is a strong imbalance between the coast and inland which has, moreover, worsened in recent years so that the main urban centres lie in the coastal areas (Coimbra, Aveiro and Leiria), without prejudice to the existence, inland, of a handful of extremely dynamic towns of medium size (Viseu, Castelo Branco, Covilhã). The Centre region is still an area of wide territorial and productive diversity. Its physical and geographical layout, and in particular its orography, are, moreover, of major importance in determining the population and its development and in structuring the regional urban system and has obvious implications in the design of the regional road network. It possesses a very rich historical, architectural and artistic heritage and has natural resources of notable quality. On the coast, it has competitive and dynamic undertakings and installed technological infrastructures. In recent years, the region has endeavoured to gain a position of excellence in the field of health, using existing equipment to advantage (hospitals linked to the University of Coimbra, for example) and initiatives by local bodies. In the period covered by the third CSF, efforts will be made to structure and coordinate the urban systems, complete the major regional lines of communication, enhance the fabric of production and business, develop the health sector, utilise fully the traditional skills of the region as regards higher education, preserve natural resources and develop tourism. The following are chosen as areas of action: (i) citizenship, social cohesion and human capital; (ii) the urban system; (iii) accessibility and the exploitation of geographical opportunities; (iv) water resources and (v) forest resources and forest management. Under these conditions, the general objective of Community action in the Centre region for the period 2000-06 is the enhancement of the factors of competitiveness of the regional economy through the enhancement of the means and human resources, the creation of economic infrastructure, making access to the new technologies and information dynamic, making business dynamic and the effective utilisation of traditional products and the resources of the region. The priorities of the respective operational programme are as follows:

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• Guarantee of universal services to the population through the continuation of the efforts already made with a view to making essential public services widely available, in particular in the fields of education and health, with the objective of promoting citizenship, social cohesion and the quality of human capital;

• Effective utilisation of the urban system, recognizing the notable potential, from the point of

view of the development of the region, of the existing urban systems and paying special attention to the processes of urban enhancement and of town planning which facilitate mobility, utilise public space and promote the regeneration of those areas showing the greatest fragility in terms of the economic and social fabric;

• Promotion of local and rural development, the aim being to encourage endogenous development

and the pilot experiments which make the most of the heritage, products and natural resources and strengthen the capacity of regional and local organisation;

• Action in territorial areas, with measures being promoted in specific areas characterised by their

dynamics or inadequacies. 2.1.2.3. Lisboa e Vale do Tejo The region of Lisboa e Vale do Tejo has a total population of 3 319 860 inhabitants, corresponding to 33.3% of the national total, distributed over an area which is relatively small by comparison with the other regions of the country (11 900 km²). Population density, at 278 inhab./km2 (more than 2.5 times the national mean density) is, accordingly, very high in the national context. Noteworthy is the major importance of Greater Lisbon in the region as a whole and in the country: 1 834 060 inhabitants. In terms of activities, Lisbon’s Metropolitan Area has a very important tertiary sector, due not only to the concentration of national political/administrative functions (status as capital) but also to the predominance of distribution on a wide scale and of services, to transport and logistical, financial and telecommunications undertakings as well as to educational and scientific research institutions. It governs the development of the region through three main aspects (polarisation, road network and extensive growth) and reflects the predominance of a traditional and centred type land-use development model. In its turn, the western coastal fringe shows important specific aspects, with tension among types of land use (agriculture, industry, tourism and leisure). Finally, Vale do Tejo, through its structuring capacity in different spheres (landscape, cultural heritage, economy, accessibility) represents a third model of land-use development of the region. The development of the Lisboa e Vale do Tejo region in the period covered by the third CSF will have to be based on an integrated perspective which ensures complementarity between the different parcels which constitute the regional whole and, with this in view, promote the necessary balances between the consolidation of the conditions of sustainable development, from an environmental, economic and social point of view, concerns as to territorial equity, aiming at a more cohesive and coherent operation of the region as a whole. The drawing up of a new functionality for Lisbon, a city which is too big in regional terms and too small in international terms, constitutes a very important necessity in this context. Under these conditions, the regional programme of Lisboa e Vale do Tejo has as its overall objective to contribute towards converting the region in question into a territory of high quality in terms of environment, heritage and town planning in a competitive area, a context favourable to creativity and innovation, and on a platform of national and international intermediation, ensuring, at the same time, the necessary internal cohesion from the social, economic and territorial point of view.

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Under these conditions again, the main development objectives of Lisboa e Vale do Tejo region for the period 2000-06 which constitute the priorities of the respective regional operational programme, are as follows: • Enhancement of the territory and improving the environmental and living conditions of the

population, with a view not only to satisfying the needs of the population in terms of infrastructures and equipment but also to strengthening the economic, social and territorial cohesion of the region;

• Enhancement of human resources and improvement of employability, with a view to remedying

problems relating to unemployment, social exclusion and marginality. Indeed, although the region overall shows more favourable signs than those recorded in the rest of the country (particularly as regards the structure of the skills of its population), major problems do, however, persist in connection with unemployment, especially where young people and women are concerned, and also a high percentage of long-term unemployment.

• Making the institutional capacity and external visibility of the region dynamic by creating

conditions favourable to territorial cooperation; • Effective utilisation of the structuring and competitive factors of the sub-regions, allowing

internal territorial re-equilibrium via measures aimed at the balance and enhancement of Lisbon’s metropolitan area, correcting the highly centralised nature of its territorial structure; at the consolidation of medium-sized towns and the complementary urban system, corresponding to the consolidation of the non- metropolitan urban system and at the structuring of an urban network based on various nuclei, which strengthens and turns to good account the role of medium-sized towns and their interlinking with the rural environment; and at the effective utilisation of the Tagus by deriving benefit from an interlinked management of its potential.

2.1.2.4. Alentejo The region of Alentejo has a total population of 514 790 inhabitants, corresponding to only 5.2% of the national total; given its large area (26 900 km2), this figure is reflected in a very low population density (19 inhab./km2). It is also the region with the greatest number of elderly people in the country. Since 1981 there has been a constant reduction in population in all Alentejo’s sub-regions, despite internal population movements to the main regional urban centres and the industrial centre of Sines and the areas on the coast. In addition to its limited human capacity (by reason of the ageing of the population, but also of the low level of skills among existing human resources), the Alentejo region shows limited signs of the exploitation of infrastructures and equipment, a very low production capacity and evident institutional weakness, making it one of the least prosperous regions in Europe. The recent progress in the conditions of road accessibility and the planned interlinking with the railway networks, ports and airports and the good environmental conditions stand out as positive aspects. The process of the development of Alentejo have to be based on strengthening and consolidating the existing urban system, the realisation of the regional and municipal lines of communication needed for the integration of towns and of these with the areas of business concentration, the establishment of transport and communications services aiming at intermodal integration; the consolidation of economic competitiveness factors and the consideration of dynamic relationships with other regions of the country, especially bearing in mind the proximity of Alentejo to Lisbon’s metropolitan area. In connection with the foregoing, some structuring measures and projects of fundamental importance for the region deserve mention. Thus the enormous potential of the port of Sines, both

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at national level and in terms of its contribution towards the economy of Alentejo, may be mentioned, as may the development of the coast for tourism and the emergence of the centre of development represented by the area of business influence in Alqueva. Under these conditions, the main development objectives of the Alentejo region for the period 2000-06 which constitute the priorities of the respective regional operational programme are as follows: • To promote the integration of the territory, initially by making good use of regional logistics in

a context of interregional and international interlinking and, later, by consolidating and exploiting the regional potential of the lines of communication which bind Portugal and Spain;

• To develop regional economic potential, diversifying and maximising the basis of the economy

and attracting investment and business capacity with a view to the internationalisation of the regional economy;

• To improve organisation, functionality and intra-regional cohesion through the consolidation of

the urban system and of its interlinking with the rural environment and of the promotion of regional mobility;

• To create employment and improve human resources, in particular by the qualification and

occupational integration of the unemployed, support for local organisations for the development of employment, support for investment in local initiatives creating employment and support for the creation of employment in local initiatives;

• To reinforce regional identity in a context of change by adapting undertakings to the criteria of

innovation and quality, access to knowledge and the development of the digital economy and the promotion of the information society.

Alentejo’s regional operational programme additionally incorporates a Priority for the financing of the Specific Programme for the Integrated Development of the Alqueva Area (PEDIZA II). This programme represents a basic instrument for the economic development of all the areas directly or indirectly covered by the project for the construction of the Alqueva dam and, more generally, the development of Alentejo as a whole. Thus, in addition to the specific objectives associated with the Alqueva Multi-Purpose Enterprise Scheme, this Priority IV of Alentejo’s regional operational programme has been drawn up in the light of the following priorities: • the minimisation of impact in environmental and heritage terms resulting from the construction

of the Alqueva dam; • the establishment of favourable conditions for the development of a new agricultural model

which fosters transition to irrigated crops, following the increase in irrigable area; • the exploitation of the opportunities to impart dynamism to the local and regional economic

fabric arising from the use of this infrastructure; and • making the most of human resources against the background of support for local and regional

development. 2.1.2.5. Algarve The Algarve region has a total population of 347 380 inhabitants, corresponding to 3.5% of the national total, distributed over an area totalling 5 000 km2, giving a population density of 68 inhab./km2. Over the year, the population in Algarve fluctuates significantly, reflecting the importance of tourism in the regional economy. Tourism, furthermore, justifies the importance of

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the tertiary sector in the regional GVA, which is the highest in national terms, but, on the other hand, it determines the uniformity of the regional economic basis and the strongly seasonal nature of economic activity and employment. The pattern of land use reflects this situation, with obvious importance being attached to the coast, not only by virtue of the physical characteristics of the region but because the coastal area benefits from the greater dynamism of economic activities, commerce and services linked to tourism, and, accordingly, continuously attracts flows of immigration of inland origin, causing the Algarve mountain range to be emptied. In their turn, the infrastructures built since 1980, and those provided for in respect of the next period of the third CSF, strengthen the longitudinal transport corridor situated on the coast, while priorities of external accessibility furthermore contribute to the same purpose. Between 2000 and 2006, the region of Algarve must set itself, as an important priority, the diversification of the regional economy, by creating alternative products and services linked to the environment, to the sea, to regional historical centres and to the modernisation of agriculture. Indeed, the economy of Algarve is dependent not only on tourism but on a specialised type of tourism, namely the “sun/beach” type. Major efforts must still be made in relation to improving the skills of regional human resources and enhancing the environment and basic sanitation (suitable for the needs of the fluctuating population). From the point of view of internal and external accessibility, the investments to be made (some of them at national level) must take into consideration the need to compensate for the peripheral geographical situation through the possibility of easy contact with outside, without prejudice to the internal needs of the region, which are still to be met. Finally, special attention must be paid to interlinking the urban fabric with the rural world, this being outlined, in a way, in the model of land-use development based on coastal tourism, which has so far prevailed in the region. Thus this development strategy for the region promotes, overall, the effective utilisation of the different areas (coastal, naturally-excavated and mountain range) in a model of equilibrium between a logic of territorial solidarity and a logic of integration of activity dynamics and entails the creation of conditions which project the region outwards and enhance its attractiveness. Under these conditions, territorial competitiveness lies at the heart of drawing up strategic options for the development of Algarve, and the following objectives, specified for the development of this region in the period 2000-06, constitute the priorities of its respective regional operational programme: • To assert regional economic competitiveness, centred in the array of tourism and leisure

activities by taking on this specialisation, although bearing in mind the need to extend the array of activities centred around this economic priority and, at the same time, impart dynamism to the exploitation of territorial economic resources;

• To construct conditions of regional competitiveness through the organisation of action and

investments by public administration bodies, main agents and private operators with a view to creating the indispensable conditions for the assertion of the competitive capacity of the region, in particular through the effective utilisation of human resources, the enhancement of the territory and environment and the consolidation of territorial integration and social cohesion.

Within the first priority, the following eight operational objectives are defined: • to consolidate the array of tourism/leisure activities; • to diversify the traditional tourist facilities on offer; • to develop primary activities to meet tourist demand;

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• to develop construction activities to structure regional supply; • to make the most of culture and heritage as aspects in the affirmation of identity; • to strengthen the segments of traditional and specialised commerce; • to maximise marine, agri-forest and mineral resources; and • to strengthen services supporting economic activity for the enrichment of the fabric of business. The second strategic objective includes twelve operational objectives: • to extend and improve schooling; • to impart vocational skills to human resources; • to consolidate regional skills and back information technologies; • to complete and improve accessibility; • to structure, renew and develop the urban system; • to promote environmental quality; • to promote the establishment and organisation of infrastructures supporting productive activity; • to endow the region with structuring equipment; • to organise the territory by promoting integrated planning measures; • to impart dynamism to proximity services (personal and collective); • to make the most of, and promote, low density rural areas; • to strengthen economic and social integration. 2.1.3. Measures in the Autonomous Regions 2.1.3.1. General aspects Insularity, as a permanent phenomenon of geographical discontinuity, and peripheral location are factors which decisively influence the relations of the Azores and Madeira with continental Portugal and with Europe. The concept of ultra-peripheralness refers initially to the ideas of isolation and distance but it is also linked to a set of other structural restrictions of a historical, geographical, institutional, economic and cultural nature (government and administration traditionally distant and inattentive, small area, difficult climate and relief, etc.), whose permanence and mutual action condition and limit the development of certain regions. Remoteness from centres of political and economic decision-making and from infrastructures, equipment and services of quality situated in central regions, restrictions on access to markets and to knowledge, limits on the mobility of human capital and other factors of production, condition public and private economic flows and compound the difficulties resulting from the smallness and physical structure of the territory.

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The recognition by the European Union, in Article 299(2) of the Treaty of Amsterdam, of the need for a differentiated treatment of ultraperipheral regions which is mindful of their particular and specific features, allows a set of factors (among which those relating to accessibility in terms of transport and communications are of the utmost importance), to be promoted which can contribute towards the endogenous development of these regions, against a background of integration so as to ensure their balanced integration in more competitive areas. This recognition takes on major importance, from the point of view of the Portuguese autonomous regions, allowing development strategies adapted to their specific situation and needs to be drawn up. In the present third CSF, just as, moreover, in those which preceded it, the operational measures in the autonomous regions of the Azores and Madeira show specific characteristics. Given the political, legislative and administrative autonomy of both the regions and the powers for the management of the regional economy conferred by the Constitution on Regional Governments, the structure of these documents is different from that of similar programmes of continental Portugal. They take the form of an extensive framework accommodating measures and schemes in the most varied spheres and sectors, including those which, in continental Portugal, are pursued via sectoral programmes. To this extent, and bearing in mind the relative importance of the financial resources which they mobilise, they constitute a powerful instrument of regional economic policy which is integrated in the respective priorities defined by the regional government’s own bodies. 2.1.3.2. Azores In the national context, the Autonomous Region of the Azores is uneven in its configuration, being characterised by being an archipelago made up of nine islands which extend 600 km out into the Atlantic Ocean. The island closest to the European continent, Santa Maria, is 1 500 km away from the Portuguese coast, which is equivalent to about two and a half hours’ flying time in a commercial aircraft. The Azores have around 240 000 inhabitants, in other words their size is that of a medium-sized mainland urban centre; its population, however, is scattered over small parcels of land, the tiniest of which - the island of Corvo - has never reached the figure of 400 inhabitants. As a result of this situation, there is a major fragmentation of the regional market, of economic resources and of networks of infrastructures and basic equipment and support services for economic activity. Flows of people and goods necessarily take place by sea or air. Thus business activity, in the normal process of expansion which goes beyond the needs of the island market, has to use sea and air transport, which is expensive and generally more geared to long distances and volumes. The possibilities of generating economies of scale and agglomeration are scant and, on certain islands, purely and simply impracticable. As regards the networks of infrastructures, equipment and services referred to above, thresholds of efficiency in their use are for the most part not achieved, given the need to maintain, modernise and ensure the operation of nine different systems (airports, ports, production, transport and distribution of electricity, the collection and treatment of solid urban waste, etc.) intended to meet the needs of small population groups very far apart. For a minimum range of conditions equivalent to that of similar adjacent areas in continental Portuguese territory, the investment required is proportionally higher, since on some islands there are situations of forced under-utilisation of the facilities in question. As positive aspects, when identifying development opportunities, we may point to the symbolic image of the islands, associated with their historical role as places of adventure and seclusion and the profound cultural identity of the region, which is strongly marked by isolation and the proximity of the sea. The wealth and variety of historical and cultural assets, the natural landscape, the fauna and flora and the absence of signs of pollution are features which attract visitors and tourists, even though the Azores do not, on account of their climatic and physical characteristics, lend themselves to mass tourism and must find suitable market niches. The unpolluted regional image associated with the region can allow the capacity for the supply of some regional products, identified by their origin and ecological component, to develop. On the other hand, their volcanic origin allows scientific research activities to be carried out in this sphere. The exploitation of high enthalpy

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geothermal resources is currently a reality in São Miguel, and it can be developed and probably extended to other islands in the next few years. Finally, the location of the Azores bestows an important geo-strategic role on them. Agriculture and rural development Farming, together with activity in the agri-industrial sector with which is associated, continues to be of very great importance in the Azores, where it accounts for about 20% of GDP and one-third of total employment. The predominance of cropping and stockfarming in the agricultural sector is in general very marked, and this accounts for the fact that this sector shows a significant production capacity, even in the national context. However, the limitations resulting from insularity, and especially dispersion across nine islands (some of them of very small), are negatively reflected in terms of both the supply of inputs and the disposal of production and furthermore of technical/administrative support. Bearing in mind the importance of the agricultural and forest sector in this region, not only in economic terms but also through its function of conserving the environment and maintaining the countryside, the main objectives of support for agriculture and rural development in the region are: to improve the competitiveness of the agricultural and agri-forestry sectors; to contribute towards proper town and country planning, attenuating the negative consequences of the growth of agriculture and agri-industry on the environment; to support quality agricultural products which are characteristic of the region; and to create opportunities for the diversification of production and for the establishment of alternative employment in the rural environment. Fisheries and marine resources The archipelagic nature of the region makes the existence of an exclusive economic area of major importance possible and it not only requires the proper exploitation of existing marine resources (namely through the use of fishing gear and methods orientated towards catching new demersal fish resources), but makes possible the development of scientific activities linked to the sea, in which the University of the Azores, through its specialised centres on the island of Faial, will be able to be a driving force. As regards fisheries specifically, the importance of the sector in the regional economy should be pointed out. In this sphere, the inversion of the situation of seasonality of the sector is desirable, as is the suitable training of fishermen and entrepreneurs, associated with a gradual change in mentality and the renewal and restructuring of the fleet, particularly as far as the conditions of safety, habitability and autonomy of the boats are concerned, but in accordance with the rules laid down by the common fisheries policy, bearing in mind, in particular, the need to adjust fishing effort to available fish resources. The retraining of professional fishermen for other activities (like tourism) is another objective to be pursued. On the other hand, drawing up and implementing a policy for the management of fish resources is of fundamental importance. As regards the rest of the sector (aquaculture, processing of products), the rules defined earlier must be applied in the context of sectoral action. Employment and vocational training The inadequacies of the educational system, both in terms of infrastructure and human resources, are one of the main obstacles to the development of the Azores. The skills imparted by the educational and vocational training systems do not meet the needs of qualified labour in the economy and society of the Azores, making their full integration in a European and international context impracticable. These shortcomings, associated with situations of poverty and social exclusion, lead to major levels of failure and school-leaving, low rates of scholastic education and inadequate skills, making occupational integration, namely of young people and women, difficult. The process of restructuring the vocational training system which has already been started must incorporate a strategic and prospective vision of qualifications and be established as an alternative and complement to the educational system, developing courses for integration and for lifelong education. The drawing up of a system of shared investment in training must involve participation by all the social and economic forces in the region, particularly the regional administration, undertakings and trainees.

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Environment Urban pressure on the coast, the discharge of untreated sewage, the dumping of solid waste - often using the maritime fringe and the water network as common receptors -, the existence of maritime infrastructures and the traffic of vessels are some factors endangering the ecological balance of the region. In particular, the management of solid waste is a major cause for concern, due to the harmful effects on the environment, on health and on the quality of life of the people, as a result of the inadequacy of the treatment systems. The water system of the Azores is fragile and vulnerable to various forms of human intervention and to pollution. Action to protect the “water” resource in the face of certain agricultural/stockfarming practices and the use of chemical products on the land in particular thus becomes necessary. Consideration of the environmental dimension will take place transversally in all the measures and schemes supported by the Structural Funds and will have to constitute a general priority of government action. Transport The development of an efficient and cheap system of internal transport for passengers and goods is essential for the development of the Azores and a necessary condition for the attainment of the regional internal market. This objective entails operations to consolidate and maintain airport and maritime infrastructures, especially those which suffered damage as a result of recent storms and earthquakes. In a general way, improving contacts with outside, depending on the international development of air and marine transport, is a condition for opening up the economy to outside and, in this way, for regional economic growth. Telecommunications In a region characterised by geographical dispersion and distance, the telecommunications sector assumes crucial importance, not only from the point of view of activity (and services) but also from that of the cultural development and well-being of the people, contributing towards breaking their isolation. Although possessing undeniable technical qualities and still having good prospects for the future, the current communications of the Azores with outside, provided by satellite, give rise to constraints in telecommunications services, namely in the area of data communication. The installation of the submarine cable between continental Portugal and the Azores, supported by optical technology, is the technological alternative best suited to solving the region’s problems. Under these conditions, the main strategic guidelines for the period 2000-06 are as follows:

• To support the dynamics of economic development through the integration of, and support for, economic agents for the promotion of higher levels of competitiveness and partnership; and of the readjustment of the regional economic basis, promoting greater diversification of the production system, namely by the increasing affirmation of tourism and similar services.

• To promote improved skills among human resources and the stabilisation of the

employment market through the conception and application of mechanisms for initial vocational training and qualifying training for the unemployed and workers in areas of activity undergoing major restructuring; and of the creation of structures which allow the requirements of the labour market to be anticipated and the needs of emergent sectors to be identified.

• To foster structuring networks and the reinforcement of the geo-strategic position of

the territory by improving the efficiency, effectiveness and functionality of the transport and energy networks and promoting the regional integration of the information society, in particular through access to international telecommunications networks; and promoting the affirmation of the Azores as a priority area for the development of oceanic research and seismology/vulcanology.

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• To promote the sustained balance of the territory and living conditions of the people by

making the most of, and protecting, island ecosystems, with special attention to the problems of water resources, the protection of the maritime fringe and the conservation of natural habitats and endemic fauna and flora; and improving the efficiency and functionality of networks of equipment and social services (education, health, social solidarity), of the conditions for the development of the urban area and its interlinking with rural areas, and the effective utilisation of the cultural and historical heritage of the region.

These guidelines are reflected in the following priorities of the regional operational programme:

• The modernisation and diversification of the production system Realisation of this objective involves establishing partnerships between the business sector and local and regional public authorities for the integration of public and private investment orientated, on the one hand, towards creating external savings from which the activity of undertakings benefits and, on the other, towards increasing competitiveness in production.

• Stepping up the level of skills in human capital Implementation of this objective presupposes a significant effort of public investment in the area of school equipment, in the scientific and technological system and in vocational training, facilitating the transition from school to working life, improving the levels of work skills, strengthening equal opportunities policies and seeking to maintain stability and balance on the labour market.

• The development of regional networks of infrastructures and equipment in the sphere of intra- and inter-regional accessibility and the quality of life The achievement of this objective requires the intervention of regional public authorities in road, port and airport networks, in energy supply, in the environmental system and the public health network, as well as complementary measures in connection with organising cultural and sports events.

2.1.3.3. Madeira Composed of two islands, Madeira and Porto Santo, a short distance apart but with fundamentally different characteristics, the archipelago which takes the name of the larger of the two has an overall area of 776.8 km², in which some 257 000 inhabitants live, more than half of them in the capital, Funchal (the population of Porto Santo does not in fact exeed 5 000). The scant endogenous resources and the small regional market, the governing physical factors - including those due to the tropical nature of the climate - and also the combination of historical factors have largely determined a pattern of production specialisation which is vulnerable, not very diversified and highly dependent on outside. Thus Madeira’s economy is still based on a number of specific regional products (wine, embroidery, wickerwork, subtropical fruits and flowers) and on tourism. In recent years, and benefiting from the support provided by Community funds under CSF I and II and from the Community initiative REGIS I and II, Madeira embarked on an ambitious development programme based fundamentally on public works and construction associated with joint public investment and these activities led to major advances in terms of infrastructures and, in particular, allowed the external and internal accessibility of the region to be consolidated. The construction of Santa Catarina Airport, allied to the general improvement in road communications between the main regional centres, stand as essential landmarks in the economic and social progress of the region. Furthermore, efforts have been made to develop business activity through greater internationalisation and by attracting foreign investments (with a view to extending the “chain of value”) while benefiting, moreover, from a tradition of openness to external influences on the part

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of Madeiran economy and society, a tradition based on discoveries and, throughout the 20th century, on the growth of tourist activity. This development programme was, furthermore, based on dynamism being imparted to the business activities linked to the free zone and the offshore financial centre. Education, Employment and Training In the matter of education, Madeira intends to continue the effort already initiated in the previous CSFs at infrastructure, equipment and human resources level. In particular, promoting the introduction of technological and experimental components and a first foreign language at pre-school education and first primary education cycle level is deemed necessary, as is balancing - at secondary education level - the present relationship between the frequency of courses in preparation for university education and technological and professional courses (currently 80% and 20%). This option entails major investments in the construction, restructuring and re-equipping of schools and also in the continuing education of teachers and curricular reorientation. As regards the system of vocational training, the main objective is to boost the acquisition of skills in the region by developing the provision of school education and vocational training in the following four directions: school education in areas of excellence with competitive potential; training orientated towards improving the conditions of integration in working life, in particular by consolidating technological and professionalising education; training aiming at professional rehabilitation; and training in strategic skills for the modernisation of undertakings (which entails considering the dimensions of training and innovation in investment projects). Scientific and technological system, innovation and the information society The internationalisation of the scientific, technological and innovation systems is indispensable. With this in view, the participation by research units and economic agents in international networks, mainly in fields of strategic importance from the point of view of regional development (marine biology, environment and energy, culture), must be stepped up. Moreover, cooperation and the exchange of experiences with undertakings outside the region must be promoted with a view, mainly, to the development of innovation projects, the improvement of access to Portuguese, European and world markets and the demand for solutions to problems common to ultraperipheral regions. In the information society sphere, infrastructures and associated services will need to be developed and the adoption of active policies which bring the possibility of access to knowledge closer, preventing situations of competitive disadvantage arising in relation to the better equipped central regions, will need to be promoted. Environment It is important, firstly, to preserve, restore and promote the sustainable management of natural resources (with special relevance in the case of water, marine resources, forests and the landscape) and make the most of the natural heritage, already integrated in protected areas (with the extension of these areas, when this is justified). With this in view, the organisation and effective utilisation of watercourses, thereby strengthening the security of urban centres, and the pursuit of efforts towards ensuring that all the population has safe access to this resource, must be guaranteed. In the field of solid urban waste management, a high standard of environmental quality will need to be introduced by, in particular, the establishment of a system of integrated management which ensures consolidation of the capacity to utilise effectively and dispose of the waste produced in Madeira and Porto Santo; by complying with the objectives laid down in relevant Commuity Directives and, in particular, the Directive on waste and packaging; by controlling the costs associated with the process of waste disposal; and by reducing its current level through environmental awareness/ information/education campaigns and campaigns to promote sustainable models of consumption. Consideration of the environmental dimension will take place transversally in all the measures and schemes supported by the Structural Funds and will have to constitute a general priority of government action.

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Agriculture and rural development The difficulties faced by Madeiran agriculture are well known and result mainly from island’s mountainous terrain; this has caused the majority of agricultural holdings to be small and scattered in different blocks and mostly located in high altitude areas. However, the agricultural and forestry sector, in addition to its specific economic importance as a productive activity, performs an important function in maintaining and conserving the characteristic landscape of the region, with obvious repercussions on tourism, which is so significant for its economy. With this in mind, support for agriculture and the rural development of Madeira must be regulated to fulfil two complementary objectives: on the one hand, stimulating investments likely to improve the competitiveness and diversification of quality products which are characteristic of the region and, on the other, supporting family holdings in a way which accords priority to the multi-functionality of agriculture and the diversification of activities in the rural environment, and also the improvement of the living and working conditions of farmers and the rural population. Finally, the organisation and management of forest areas constitute another priority objective, bearing in mind the importance of the forestry sector to the region. Along the same lines, rural development measures must be devised with the objective of promoting rural land use through complementary or alternative opportunities of employment for farmers, and of improving conditions for people living in rural areas. Fisheries As regards fisheries, attention should be drawn to the importance of the sector in the regional economy. The objectives to be pursued will have to provide for measures aimed at the restructuring, renewal and modernisation of the regional fleet, with a view to matching fishing effort and available fish resources and to improving working conditions on board and vessel safety. The partial vocational retraining of professional fishermen for other activities (namely, tourism) must be fostered. As regards the rest of the sector (aquaculture, processing of products), the rules specified earlier must be applied in the context of sectoral action. Infrastructures While continuing with the effort carried out in recent years, the interlinking of the road network and the link with major lines of communication will need to be tightened in order to ensure the integration of regional areas and promote the islands’ link with outside and with the main areas of industrial activity. Along the same lines, it is important to improve accessibility to internal areas and promote the rationalisation of the land transport system for the environmental benefits which will result, mainly in a city like Funchal, where the pressure on living space is enormous (more than 1 300 inhabitants per km²). Good links by sea and air with outside are critical for the sound performance of economic activity. Under these conditions, the following are the major objectives of action under the Structural Funds in the Autonomous Region of Madeira in the period of application of the third CSF and they constitute the priorities laid down at the corresponding regional operational programme level:

• To strengthen the competitiveness and geo-strategic position of Madeira’s economy;

• To promote employment and employability;

• To secure the improvement of the quality of life and preserve environmental values.

The objectives set out are to be achieved by pursuing a number of specific objectives which are arranged according to spheres or areas of action:

• To strengthen and promote the efficiency of business and production;

• To use human resources and capacity for innovation effectively;

• To further the development of infrastructures and services associated with the information society;

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• To improve external accessibility and promote an efficient use of existing capacities in terms of infrastructures, and transport and communications services;

• To promote internal cohesion and the improvement of the quality of life;

• To preserve environmental values and cultural heritage.

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North

Socio-economic characteristics

Year Unit Demographic and social indicators

Area 100 Km2 213 Population 1997 103 3 561.8 Population density “ Inhab./Km2 167.0 Birth rate 1997 ‰ 12.3 Death rate “ “ 8.9 Ageing index “ % 67.8

Health Hospitals 1997 No 63 Doctors per ‘000 inhabitants “ ‰ 2.5 Beds per ‘000 inhabitants “ “ 4.0

Education Number of pupils

Primary 1998/1999 No 478 511 Secondary “ “ 127 344 Higher “ “ n/a

Educational establishments Primary 1995/96 No 4 879 Secondary “ “ 208 Higher “ “ 91

Net rate of primary scholastic education 1996/97 % 80 Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 90 443 Museums “ No 72 Libraries “ “ 413 Public entertainment/Performances “ “ 32 960

Economic indicators GVApm 1996 ESC 106 4 383 027

Primary sector “ % 3.2 Secondary sector “ “ 44.0 Tertiary sector “ “ 52.8

GDP/Inhab. 1997 ESC 103 1 577

Disposable family income per head 1995 “ 1 017 Poverty rate (3) 1995 % 19.6 Employment 1998 103

1 715.6 Primary sector “ % 13.9 Secondary sector “ “ 47.8 Tertiary sector “ “ 38.3

Rate of activity “ “ 50.5 Rate of unemployment “ “ 4.9

Environment (2) Water supply 1997 % 71 Waste water drainage “ “ 51 Urban waste water treatment “ “ 24 Solid urban waste treatment “ “ 46

Comfort indicators Dwellings with

Running water 1997 % 93.0 Fixed bath/shower “ “ 86.9

Telephones “ “ 78.4 Transport and communications

Road network 1996 Km 2 696 Main routes “ “ 664 Feeder routes “ “ 352

(1) Mainland Portugal (2) Overall levels of attendance

(3) Percentage of population below the poverty line (population with an income below 50% of average national income/ Population of the region).

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Centre

Socio-economic characteristics

Year Unit

Demographic and social indicators

Area 100 Km2 237 Population 1997 103 1 710,4 Population density “ Inhab/Km 72.3 Birth rate " ‰ 10.2 Death rate “ “ 12.0 Ageing index “ % 113.4

Health Hospitals 1997 No 41 Doctors per ‘000 inhabitants “ ‰ 2.6 Beds per ‘000 inhabitants “ “ 5.0

Education Number of pupils

Primary 1998/1999 No 205 019 Secondary “ “ 72194 Higher “ “ n/a

Educational establishments Primary 1995/96 No 3 272 Secondary “ “ 132 Higher “ “ 54

Net rate of primary scholastic education 1996/97 % 80.1 Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 24 057 Museums “ No 55 Libraries “ “ 308 Public entertainment/Performances “ “ 9 073

Economic indicators

GVApm 1996 ESC 106 2 283 511 Primary sector “ % 6.7 Secondary sector “ “ 37.9 Tertiary sector “ “ 55.4

GDP/Inhab. 1997 ESC 103 1 545

Disposable family income per head 1995 “ 1 057 Poverty rate (3) 1995 % 28.8 Employment 1998 103

912.2 Primary sector “ % 26.4 Secondary sector “ “ 32.7 Tertiary sector “ “ 40.9

Rate of activity “ % 54.7 Rate of unemployment “ " 2.5

Environment (2) Water supply 1997 % 89 Waste water drainage “ “ 54 Urban waste water treatment “ “ 36 Solid urban waste treatment “ “ 15

Comfort indicators Dwellings with

Running water 1997 % 92.0 Fixed bath/shower “ “ 86.6 Telephones “ “ 73.0

Transport and communications Road network 1996 Km 2 620 Main routes “ “ 760 Feeder routes “ “ 874

(1) Mainland Portugal (2) Overall levels of attendance

(3) Percentage of population below the poverty line (population with an income below 50% of average national income/ Population of the region).

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Lisboa e Vale do Tejo Socio-economic characteristics

Year Unit Demographic and social indicators

Area 100 Km2 119 Population 1997 103 3 319.9 Population density “ Inhab/Km2 278.0 Birth rate " ‰ 11.0 Death rate “ " 10.7 Ageing index “ % 97.7

Health Hospitals 1997 No 79 Doctors per ‘000 inhabitants “ ‰ 3.8 Beds per ‘000 inhabitants “ “ 5.0

Education Number of pupils

Primary 1998/1999 No 369 707 Secondary “ “ 145 279 Higher “ “ n/a

Educational establishments Primary 1995/96 No 2 869 Secondary “ “ 229 Higher “ “ 112

Net rate of primary scholastic education 1996/97 % 86 Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 386 665 Museums “ No 133 Libraries “ “ 657 Public entertainment/Performances “ “ 93 442

Economic indicators GVApm 1996 ESC 106 6 427 223

Primary sector “ % 2.5 Secondary sector “ “ 28.1 Tertiary sector “ “ 69.4

GDP/Inhab. 1997 ESC 103 2260

Disposable family income per head 1995 “ 1348 Poverty rate (3) 1995 % 21.0 Employment 1998 103

1 534.3 Primary sector “ % 5.1 Secondary sector “ “ 27.9 Tertiary sector “ “ 67.0

Rate of activity “ % 49.2 Rate of unemployment “ “ 6.1

Environment (2) Water supply 1997 % 98 Waste water drainage “ “ 86 Urban waste water treatment “ “ 53 Solid urban waste treatment “ “ 66

Comfort indicators Dwellings with

Running water 1997 % 94.4 Fixed bath/shower “ “ 96.1 Telephones “ “ 88.3

Transport and communications Road network 1996 Km 1 991 Main routes “ “ 296 Feeder routes “ “ 775

(1) Mainland Portugal (2) Overall levels of attendance

(3) Percentage of population below the poverty line (population with an income below 50% of average national income/ Population of the region).

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Alentejo

Socio-economic characteristics

Year Unit

Demographic and social indicators

Area 100 Km2 269 Population 1997 103 514.8 Population density “ Inhab/Km2 19.2 Birth rate " ‰ 9.0 Death rate “ “ 14.6 Ageing index “ % 147.2

Health Hospitals 1997 No 10 Doctors per ‘000 inhabitants “ ‰ 1.7 Beds per ‘000 inhabitants “ “ 3.0

Education Number of pupils

Primary 1998/1999 No 60 017 Secondary “ “ 20 827 Higher “ “ n/a

Educational establishments Primary 1995/96 No 858 Secondary “ “ 42 Higher “ “ 11

Net rate of primary scholastic education 1996/97 % 77.7 Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 3 056 Museums “ No 37 Libraries “ “ 118 Public entertainment/Performances “ “ 3 479

Economic indicators

GVApm 1996 ESC 106 683 096 Primary sector “ % 12.7 Secondary sector “ “ 32.6 Tertiary sector “ “ 54.7

GDP/Inhab. 1997 ESC 103 1 574

Disposable family income per head 1995 “ 961 Poverty rate (3) 1995 % 30.8 Employment 1998 103 209.8

Primary sector “ % 13.8 Secondary sector “ “ 26.8 Tertiary sector “ “ 59.4

Rate of activity “ % 44.5 Rate of unemployment “ “ 8.1

Environment (2) Water supply 1997 % 92 Waste water drainage “ “ 84 Urban waste water treatment “ “ 59 Solid urban waste treatment “ “ 14

Comfort indicators Dwellings with

Running water 1997 % 90.8 Fixed bath/shower " “ 85.0 Telephones " “ 73.9

Transport and communications Road network 1996 Km 1 789 Main routes “ “ 718 Feeder routes “ “ 310

(1) Mainland Portugal (2) Overall levels of attendance

(3) Percentage of population below the poverty line (population with an income below 50% of average national income/ Population of the region).

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Algarve

Socio-economic characteristics

Year Unit

Demographic and social indicators

Area 100 Km2 50 Population 1997 103 347.4 Population density “ Inhab/Km2 69.5 Birth rate “ ‰ 11.0 Death rate “ “ 13.0 Ageing index “ % 114.2

Health Hospitals 1997 No 6 Doctors per ‘000 inhabitants “ ‰ 2.3 Beds per ‘000 inhabitants “ “ 3.0

Education Number of pupils

Primary 1998/1999 No 45 540 Secondary “ “ 15 474 Higher “ “ n/a

Educational establishments Primary 1995/96 No 399 Secondary “ “ 23 Higher “ “ 10

Net rate of primary scholastic education 1996/97 % 87.4 Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 2 262 Museums “ No 15 Libraries “ “ 41 Public entertainment/Performances “ “ 2 778

Economic indicators

GVApm 1996 ESC 106 536 287 Primary sector “ % 7.0 Secondary sector “ “ 14.3 Tertiary sector “ “ 78.7

GDP/Inhab. 1997 ESC 103 1815

Disposable family income per head 1995 “ 1161 Poverty rate (3) 1995 % 22.5 Employment 1998 103

154.7 Primary sector “ % 12.7 Secondary sector “ “ 20.6 Tertiary sector “ “ 66.7

Rate of activity “ % 47.4 Rate of unemployment “ “ 6.1

Environment (2) Water supply 1997 % 88 Waste water drainage “ “ 81 Urban waste water treatment “ “ 64 Solid urban waste treatment “ “ 20

Comfort indicators Dwellings with

Running water 1997 % 89.6 Fixed bath/shower “ “ 88.6 Telephones “ “ 76.8

Transport and communications Road network 1996 Km 373 Main routes “ “ 120 Feeder routes “ “ 105

(1) Mainland Portugal (2) Overall levels of attendance

(3) Percentage of population below the poverty line (population with an income below 50% of average national income/ Population of the region).

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Autonomous region of Azores

Socio-economic characteristics

Year Unit

Demographic and social indicators Area 100 Km2 23 Population 1997 103 243.8 Population density “ Inhab/Km2 104.4 Birth rate “ ‰ 14.4

Death rate “ “ 11.6 Ageing index “ % 51.9

Health Hospitals 1997 No 8.0 Doctors per ‘000 inhabitants “ ‰ 1.8 Beds per ‘000 inhabitants “ “ 7.0

Education Number of pupils

Primary 1995/96 No 42 011 Secondary “ “ 10 325 Higher “ “ 2 727

Educational establishments Primary 1995/96 No 322 Secondary “ “ 17 Higher “ “ 4

Net rate of primary scholastic education “ % n/a Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 7 899 Museums “ No 15 Libraries “ “ 45 Public entertainment/Performances “ “ 4 168

Economic indicators GVApm 1996 ESC 106 265 604

Primary sector “ % 11.6 Secondary sector “ “ 19.6 Tertiary sector “ “ 68.9

GDP/inhab. 1997 ESC 103 1242

Disposable family income per head 1995 “ 920 Employment 1998 103

92.4 Primary sector “ % 18.2 Secondary sector “ “ 24.1 Tertiary sector “ “ 57.7

Activity rate “ “ 40.5 Unemployment rate “ “ 4.8 Environment (2)

Water supply 1996 % 98 Waste water drainage “ “ 43 Urban waste water treatment “ “ n/a Solid urban waste treatment “ “ n/a

Comfort indicators Dwellings with

Running water 1997 % 97.3 Fixed bath/shower “ “ 82.5 Telephones “ “ 73.1

Transport and communications Road network 1996 Km n/a Main routes “ “ n/a Feeder routes “ “ n/a

(1) Mainland Portugal (2) Overall levels of attendance

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Autonomous region of Madeira

Socio-economic characteristics

Year Unit

Demographic and social indicators

Area 100 Km2 8 Population 1997 103 259.3 Population density “ Inhab/Km2 332 Birth rate “ ‰ 12.1 Death rate “ “ 9.9 Ageing index “ % 59.7

Health Hospitals 1997 No 8 Doctors per ‘000 inhabitants “ ‰ 2.5 Beds per ‘000 inhabitants “ “ 7.0

Education Number of pupils

Primary 1995/96 No 41 682 Secondary “ “ 10 677 Higher “ “ 2 308

Educational establishments Primary 1995/96 No 275 Secondary “ “ 13 Higher “ “ 8

Net rate of primary scholastic education “ % n/a Culture and recreation

Newspapers and magazines – yearly circulation 1995 103 8 288 Museums “ No 14 Libraries “ “ 32 Public entertainment/Performances “ “ 4 745

Economic indicators

GVApm 1996 106Esc. 307 760 Primary sector “ % 4.1 Secondary sector “ “ 18.2 Tertiary sector “ “ 77.7

GDP/inhab. 1997 103Esc. 1373 Disposable family income per head 1995 “ 1028 Employment 1998 103 117.8

Primary sector “ % 14.8 Secondary sector “ “ 31.6 Tertiary sector “ “ 53.6

Activity rate “ “ 46.9 Unemployment rate “ “ 3.5 Environment (2)

Water supply 1996 % 92 Waste water drainage “ “ 42 Urban waste water treatment “ “ n/a Solid urban waste treatment “ “ n/a

Comfort indicators Dwellings with

Running water 1997 % 94 Fixed bath/shower “ “ 91.2 Telephones “ “ 84.3

Transport and communications Road network 1996 Km 531.4

Main routes “ “ n/a

Feeder routes “ “ n/a

(1) Mainland Portugal (2) Overall levels of attendance

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CHAPTER III - TECHNICAL ASSISTANCE

TECHNICAL ASSISTANCE Bearing in mind the importance assigned by the Regulations governing the application of the Structural Funds to following-up, controlling, assessing and publicising the measures undertaken under the Operational Measures which are part of the Community Support Framework, and in order to ensure suitable conditions for the efficient conduct of the development strategy laid down and the implementation of the investments planned, a budget appropriation is reserved in the CSF and the Operational Programmes for technical assistance action or measures in the areas referred to, and also to facilitate their implementation in a global context. The objective of technical assistance is to guarantee the necessary conditions for the launching of the third CSF, ensuring the implementation and operation of systems and units for the coordination, management, monitoring, assessment and control (including, when necessary, outside audits). Continuity will have to be given to the measures implemented by way of technical assistance under CSF II and new challenges met in terms of effectiveness and efficiency in making investments, promoting the improvement of quality and consolidating models and systems. The capacity to incorporate the results of experience gained as well as the recommendations of assessment measures will be achieved via management models with greater participation by the different agents and with dynamics heavily dependent on increased recourse to new communication and information processing technologies. Support for the Environmental Network will be financed in the context of technical assistance. The Member State will ensure the information systems are updated after the third CSF has closed in order to make the information needed for the ex-post evaluation. available. The technical assistance schemes carried out under the Operational Programme for Technical Assistance to the CSF and the other Operational Programmes will have to comply with the provisions of the Regulation establishing specific rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the eligibility of expenditure for operations co-financed by the Structural Funds, specifically the provisions of Rule 11. OPERATIONAL PROGRAMME FOR TECHNICAL ASSISTANCE TO THE CSF The Operational Programme for Technical Assistance constitutes support for carrying out the overall strategy defined in the CSF in terms of the coordination of management, monitoring, control and assessment measures. - TECHNICAL ASSISTANCE CSF/ERDF • Preparation, follow-up, management, and control, including:

- organisation, regular operation and performance of specific tasks which are the responsibility of the structure are aspects of overall CSF monitoring;

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- introduction and operation of efficient instruments which are technologically suitable for the collection and processing of the information necessary for following up, managing and assessisg the CSF and the respective Operational Programmes, particularly the information system;

- implementation of specific measures for training and further training;

- control over the implementation of the CSF and its measures;

• Assessment - the introduction of instruments and the implementation of studies for the assessment of the

CSF.

• Information and publicity - measures to provide information on, advertise, publicise and create awareness of initiatives

which are planned and in progress pursuant to Articles 34 and 46 of the Regulation, and also for the exchange of experiences with other Member States.

• Studies - TECHNICAL ASSISTANCE CSF/ESF ESF technical assistance aims to guarantee the conditions necessary for the implementation and operation, over the programming period, of systems and units for the coordination, management, follow-up, assessment and control of the ESF aspect of the CSF and the effective and efficient performance of the functions in question. It also aims to contribute towards the implementation and application of instruments which improve the quality of the co-financed measures, contribute towards the structuring of the system of vocational training and, accordingly, step up the efficient utilisation of the resources made available by the Fund. The following constitute specific objectives of ESF technical assistance: Preparation, follow-up, management and control - Support for units for the coordination and management of the CSF in its ESF aspect;

- Implementation and development of the specific information system for the ESF aspect of the CSF which makes it possible to respond to the common minimum of indicators defined by the European Commission and which feeds the ESF assessment studies;

- Implementation of an Extended Technical Follow-up and Piloting System which allows the capacity for the planning, management and execution of the projects to be boosted;

- Support for the system for the control of the ESF aspect at its different levels. Assessment - The implementation of an ESF Integrated System of Assessment which will have to include the

implementation of the necessary assessment studies, in accordance with Community rules, and the development of a specific assessment function;

- the creation and development of mechanisms for observing the execution and impact of the ESF,

namely the results achieved in terms of the integration/employability of the beneficiaries.

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The specific assessment function of the ESF aspect of the CSF performed by the national body responsible for the management of the ESF will have to ensure the quality and validity of the data contained in the information system, and also the uniformity of the supply processes; promote and coordinate thematic or transversal assessment studies in the field of human resource development, particularly on the occasion of the mid-term evaluation and respective update; carry out thematic studies which allow the contribution of measures financed by the CSF towards the objectives laid down in the National Action Plan and European Strategy for Employment, to be demonstrated. Information and publicity - development of an ESF Information and Communication Plan which meets Commission

guidelines and puts into effect a national policy of information/communication for the Fund. Studies and innovative measures - Support for projects of an innovative nature intended to test and spread new approaches in terms

of content, methods and organisation and which promote the transfer of experiences and know-how in the areas of action of the Fund;

- Support for specific measures which contribute towards improving quality and towards

consolidating the vocational training system. TECHNICAL ASSISTANCE UNDER THE OPERATIONAL MEASURES • The technical assistance measures under the OMs will have to comply with the same provisions

as are in the Operational Programme “Technical assistance to the CSF” and support measures or schemes specific to the respective areas of action.

Technical assistance has transversal characteristics so that the expenditure will be considered at national level.

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CHAPTER IV – INTEGRATION OF EX-ANTE EVALUATION

In accordance with Article 41 of Council Regulation (EC) No 1260/1999, the Portuguese authorities conducted an ex-ante evaluation of the RDP submitted to the Commission. This assessment was carried out by a team of independent assessors outside the administration and its main conclusions and recommendations were taken into consideration when preparing this document. For its part, the Commission undertook an analysis of the Portuguese RDP, supported by past experience, in the Commission guidelines for programmes in the period 2000-2006 and a series of thematic evaluations covering the main spheres of intervention, and this made it possible to assess the main national proposals. This assessment allowed a number of adaptations and alterations to be made in certain fields of action of the RDP during the negotiations, in close association with the Member State, and these enabled consistency with Community policy to be ensured and the guidelines of the Commission, in particular as regards improving the skills of human resources, innovation, the development of the information society and the protection of the environment to be taken further: • Reinforcing the follow-up system, not only by consolidating the information system but also by

establishing thematic groups relating to transversal matters, such groups being established at CSF monitoring committee level and reporting to this committee at least once a year;

• Better interlinking between the sectoral and regional programmes (given the great importance

recognised by the third CSF in respect of these), by defining precise criteria for project selection, preventing overlaps of schemes and measures, establishing rules for the management of Priority 3 of regional programmes in continental Portugal and ensuring the prevalence of sectoral criteria in project selection;

• Drawing up a frame of reference for the transport and environment sectors, which makes a more

suitable coordination of ERDF and Cohesion Fund measures possible; • Identification of a set of quantified objectives and their reflection in indicators at global level

and for each CSF Priority, notwithstanding the scarcity of references on this matter in the RDP; • Financial reinforcement of the measures provided for in respect of continuing education, the

scope of the economy, employment, training and social development and Lisboa e Vale do Tejo programmes, and also the financial consolidation of the information society programmes and the peripheral region programmes;

• Establishment of a clear priority in support for SMUs and of a strategy for the stimulaton of

innovation, through the Economy and Science, Technology and Innovation programmes, guaranteeing also a decrease in direct support for investment;

• Clarification of the needs (particularly financial) and of available resources in relation to the

environment, allowing the precise drawing up of criteria, quantified objectives and indicators for the Environment programme.

On the other hand, neither the independent assessment nor the assessment by the Commission led to the diagnosis of the situation or the development strategy, or again the priorities of action, as apparent from the Portuguese proposals, being fundamentally questioned. Under these circumstances, the analysis by the assessors on the relevance of the strategy, internal and external consistency and the anticipated impact on the environment and equal opportunities for men and women, all retain their appropriateness when transferring from the analysis of the RDP to analysis of the CSF.

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1. RELEVANCE OF THE STRATEGY ADOPTED The third CSF shows the different characteristics of a strategic vision for the country organised around five aspects (plan, presuppositions, data, general objective and priority spheres), whose summary identification is indicated in the structure of Table IV-1. This vision represents an ambitious position, one which is not limited to identifying real convergence with the economies of the European Union as a goal but assumes the need to support a lasting development process and presupposes decisive backing for structural policies. There is a strong coincidence between the strategy of the third CSF and the wider perspective which is the framework of the National Plan for Economic and Social Development (PNDES), both in terms of a development model and the operational point of view. Only one objective of the PNDES (“To guarantee the sustained improvement of social protection”) is not directly reflected in the CSF, given its particular characteristics and the eligibility rules which limit action by way of the Structural Funds.

2. ANALYSIS OF EXTERNAL AND INTERNAL CONSISTENCY 2.1. ANALYSIS OF EXTERNAL CONSISTENCY In general, and in macroeconomic terms, it may be asserted that the basic philosophy behind the operational measures supported by the Structural Funds is based on the idea of acting on the aggregate supply of the economy, trying to extend and to improve its production capacity through measures applied to physical, human or organisational means of production. Its ultimate objective is thus to increase total productivity and the productivity of each factor of production considered individually.

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Table IV-1 Strategic vision (RDP 2000-2006)

O QCA III ingra

PLAN

A new centrality for the country in the Europe/global economy relationship based

• on the construction of a new growth model supported

• by a new development culture (requirement, rigour, creativity, innovation, quality, initiative andresponsibility)

founded • on the principles of sustainable development

PRESUPPOSITIONS

State of law promoting citizenship Safety of citizens Sociel cohesion and solidarity/justice Operations to regulate the markets

STRATEGIC ELEMENTS

Geo-economic integration: Portugal, Atlantic frontier of Europe and above all of the Iberian hinterland Competitiveness: activities, factors and technologies which are dynamic and structuring in the world economy Social model: solidarity and cohesion

GENERAL OBJECTIVE

To remedy, in the space of one generation, backwardness vis-à-vis developed Europe: • low productivity; • low levels of skills and qualifications; • low importance of R & D activities; • deficiencies in the provision of infrastructures; • deficit external balance of goods and services; • inter- and intra-regional disparities.

PRIORITY SPHERES

Human potential Productive activities Structuring of the territory Public management

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The third CSF is integrated in this overall philosophy. The ex-ante evaluation allows it to be considered suitable from the point of view of pursuing the overall objective of remedying, in the space of one generation, the structural backwardness of the country compared with the developed Member States, particularly in the areas of low productivity, low levels of skills and qualifications among the population, the low importance of research and development activities and the lack of infrastructures. On the other hand, bearing in mind that the main problem besetting the development of the national economy lies in its low productivity, the CSF appears as an instrument capable of bringing about worthwhile effects in this sphere in the medium term. The effects of the CSF on demand, although minor, are also important. From the point of view of a consistency analysis, it should be pointed out that some conflict may exist between these effects and the objective laid down by the European Central Bank of keeping the rate of overall inflation in the European Union below 2%, or with the need to narrow the differential between the rate of Portuguese and European inflation, which is essential to prevent major losses of competitiveness. However, as regards the first aspect, it must be pointed out that the importance of the Portuguese economy in the EU is low, since its rates of inflation are of little relevance in the determination of the overall rate. As regards the second point, the problem is a real one, but the inflationary effects of the CSF are limited and made up for by the increases in productivity to which its action will give rise. On the other hand, and by virtue of the principle of additionality, the CSF gives rise to improvements in the ratios provided for in the Stability Pact for the budget deficit and the public debt. That principle entails, indeed, national expenditure corresponding to the measures supported by the European Union being made even in the absence of the CSF. Thus the effect of Community contributions is reflected in an increase in indirect receipts (through the increase in priorities brought about by the growth of the product) and, by this means, in a reduction in the deficit and the debt. Although additionality does not take place perfectly, it does not seem that the CSF is, in itself, inconsistent with the Stability Pact, as it is able, when the pressure is really on, to reduce the current expenditure as a way of compensating for investment expenditure. 2.2. ANALYSIS OF INTERNAL CONSISTENCY 2.2.1. Sectoral operational measures In global terms, there is a match between the specific objectives of the various sectoral programmes and the strategic objectives of the CSF and, in the same way, between the specific objectives of the priorities of action provided for in each operational programme and the corresponding general objectives of the programme. The negotiations between the Commission and the Portuguese authorities allowed a number of inconsistencies in the Portuguese proposal, identified in the ex-ante evaluation, to be corrected, leading to a clearer drawing up of objectives sequentially and guaranteeing greater vertical consistency between the different levels of objectives. The other aspect which it was possible to improve in the course of the negotiations relates to the links and connections between main priorities of the third CSF and between operational programmes of the same priority or different priorities. The ex-ante evaluation identified eight spheres in which this interlinking appeared particularly important: certification and basic skills; lifelong learning/vocational training; advanced training of human resources; technological development and innovation; the information society/use of information technologies and communication; logistics; waste management; and regional and local development. It was possible to make progress and, in particular, complementary spheres of intervention and the necessary links between some programmes of Priorities 1 (Human resources) and 2 (Support for productive activity) were defined, particularly as regards support for the training and skills improvement of the active population.

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2.2.2. Regional operational measures The regional programmes of continental Portugal take on a distinct pattern and, at the same time, are of very much greater financial importance than that of CSF I and II. These programmes include three dimensions. In relation to the first (“Support for Investments of Municipal and Inter-municipal Interest”), which is traditional in Portugal and intended to ensure the involvement of towns in the process of development supported by the Structural Funds, it is important to perceive what the reasons are which lead to provision being made for support measures for economic activity in only a restricted number of regions, to the extent that economic promotion constitutes a crucial dimension of regional development strategies. The second dimension considered (“Integrated Measures with a Territorial Basis”) represents an innovative stance which sets value on selective operations from the territorial and thematic point of view, aiming to remedy the fragile aspects, or use to advantage the potential of the different regions or sub-regions of continental Portugal. The third field of action provided for in the regional operational programmes (“Regionally decentralised central government measures”) is clearly one which poses the greatest problems, yet it aims to guarantee, from the phase of the conception of the programmes, a full adaptation to the diversity of each region and a flexible programming of measures. No model applicable to all sectors and regions exists. Thus, in some cases, the strategies and objectives defined for the country as a whole are reproduced at regional level, while in others, measures and schemes adapted to the specific nature of each region are proposed, and there is one case (Sport) where no nationwide measure exists in the CSF in relation to which the regionally decentralised measure stands. As was pointed out in the ex-ante evaluation, [with] this diversity of situations it became more difficult to determine to what extent overlaps between the national and regional measures were prevented. This point was dealt with in depth in the negotiations of the CSF and it was possible to lay down, for each sector considered, the precise criteria regulating the decentralised measure of the regional programmes in accordance with objectives of a sectoral nature. The programmes of the Azores and Madeira have special characteristics, given the political, administrative and financial autonomy of these two Autonomous Regions. The organisation of Community intervention does not, however, show differences in relation to the previous programming periods which are so marked as those to be seen in continental Portugal’s regional programmes. 3. MACROECONOMIC IMPACT The ex-ante evaluation of the macroeconomic impact of the third CSF was carried out by the Portuguese authorities and the Commission using different models and with the help of experts. These models show the various ways through which the influence of the CSF is manifested in a set of macroeconomic variables. A distinction of great importance consists of knowing whether only the effects of stimulating demand (effects on demand) are taken into account or whether, by contrast, the long-term effects of productivity are also considered (the so-called effects on supply). As a result of the variations in the structure and specifications of the models applied to stimulate the highly complex inter-relations between variables, the results may differ considerably. Although all the models referred to point to positive effects from the third CSF in terms of growth and employment, the magnitude of the impact can vary substantially. Indeed, the results of the macroeconomic impact assessment of the third CSF depend on the hypotheses underlying each model.

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• The input-output model examines the impact of the CSF on overall demand, being based on the

links of demand between the different sectors. This analysis brings out the fact that the strongest effects of demand will occur in the construction sector and that of its respective suppliers, although other positive effects on different industrial sectors and services can certainly be expected.

• In addition to demand effects, the simulation HERMIN considers effects of supply through

gains in productivity and competitiveness resulting from the increase in the “stock” of infrastructures and human capital. From the conclusions of this model, it is clear that the total effects, in terms of growth and employment, are substantial during the programming period.

• The two simulations, HERMIN and QUEST II, show that these long-term effects, which

improve the structure of the production of an economy, continue to induce a level of GDP between 1 and 2% higher, even after the cessation of the payments relating to the contributions provided for in the CSF. However, the QUEST II simulation suggests that, in the Portuguese economy, which is quite open to outside, some of the overall positive effects of the third CSF can be lessened by the deterioration of the balance of trade and by a certain crowding-out of private investment as a result of an assessment of the real exchange rate and an increase in real interest rates.

3.1. INPUT-OUTPUT ANALYSIS An input-output analysis is based on a table which defines the technical relations between the various sectors of production as far as the stage of final demand for goods and services is concerned. Inversion of this table makes it possible to simulate the impact of changes in the final demand for production activities and provides a detailed view of the sectoral effects of demand for expenditure. An impact assessment of the Structural Funds and the Cohesion Fund (excluding national co-financing) in the Portuguese economy in the period between 2000 and 2006 was carried out by the Department for Prospective Studies and Planning (DPP), on the basis of the input-output model “MODEM 4A.”. In this model, supply is determined by demand and all the components of final demand, with the exception of private consumption, are exogenous. Prices are also exogenous. Production and imports in each sector are determined by final demand (save in the case of agriculture, forests and fisheries, in which production is exogenous), using matrices of technical coefficients broken down into national import coefficients. These coefficients are estimated and extrapolated on the basis of economic accounts and trends in the composition of imports in the Portuguese economy. The expenditure associated with Community funds will lead to an increase in national production and imports to satisfy the increase in demand generated directly and indirectly and bringing about an increase in the disposable income of the Portuguese which will, in its turn, produce a multiplying effect on production and imports through the rise in demand for consumer goods. It is estimated that the combination of these effects leads to an addition to the GDP which will represent about 2.1% of its overall value on average in the period 2000-2006. The most obvious impact will fall on gross fixed asset formation (GFAF), it being estimated that it amounts to approximately 7% of the total GFAF of the economy. Community funds will also lead to an increase in imports, estimated as being about 2.5% of total imports and corresponding to approximately 44% of the value of Community funds. Seeing that about 80% of Portuguese imports come from the European Union, the additional demand directed at other countries of the EU, induced by the Community funds applied in Portugal under the third CSF, will represent about one-third of the overall value of these funds.

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Table IV-2

Results of the simulation with MODEM 4A (Divergence between values with and without Community funds in real terms as %)

2000 2001 2002 2003 2004 2005 2006 2000-

2006

GDP 2.8 2.6 2.4 2.2 1.8 1.7 1.6 2.1

Private consumption 2.5 2.3 2.1 1.9 1.7 1.6 1.4 1.9 Total GFAF 10.1 9.1 8.2 7.4 6.2 5.7 5.2 7.2

Employment 2.2 2.1 1.9 1.8 1.5 1.4 1.3 1.7

SPA deficit*+ -1.0 -0.9 -0.9 -0.9 -0.8 -0.8 -0.8 -0.9

Balance of goods and services* -1.2 -1.1 -1.1 -1.0 -0.9 -0.8 -0.8 -1.0

* Divergence in percentage points of the GDP + A negative sign indicates lower deficits and a positive sign a higher deficit Source: Department of Prospective Studies and Planning (DPP) In sectoral terms, the greatest impact of Community funds will fall on the Construction branch. The gross value added (GVA) corresponding to this impact will represent 7.7% of the total GVA of the sector in 2000-2006. The implementation of the third CSF will also lead to an increase in trade, restaurant and hotel services and various other services which will be reflected in an average effect on the services sector of the order of 1.6% of the GVA of the sector. Less significant will be the impact on the GVA of industry and energy, this being expected to average 1.4% of its overall GVA. The branches of industry in which the impact will be felt more keenly are branches supplying the construction industry, namely the Non-Metallic Minerals and Other Construction Materials (impact of 4.2% and 7.2% of the total GVAs of the branches concerned respectively). 3.2. THE HERMIN SIMULATION The HERMIN models for Greece, Spain, Ireland and Portugal were developed in the 90s with the aim of obtaining comparable results of the macroeconomic impact of the Structural Funds. Each national model comprises three ample components (supply, absorption and distribution of income) which function as a system of integrated equations. While it is certain that it is the conventional “Keynesian” mechanisms which are central to the model, the supply component determines industrial output in terms of competitiveness of prices and costs also. Exchange and interest rates are variables exogenous to the model. The HERMIN model identifies three ways through which the CSF can affect the long-term potential supply of the economy: increase in investment in the physical infrastructure, growth in human capital and direct assistance to the private production sector. These ways are introduced into the model in traditional fashion (through variations in expenditure and incomes) and, additionally, through the consideration of two types of externalities: the first stems from the increase in the total productivity of the factors which is due to technological progress linked to the improvement of the infrastructure and to the higher level of human capital; and the second is associated with the role of the growth of the infrastructure and training in attracting production activities, through foreign direct investment and in the consolidation of capacity for competition on the international markets of endogenous industries. Of the various simulations relating to the third CSF which have been carried out by the ESRI Institute for the European Commission, only those which examined the impact of the European Union’s Structural Funds and the respective national public contribution are set out here, it being presumed that this expenditure ceases in 2006 in order to allow a clearer identification of the continued effects of supply. The values chosen for the externalities are based on estimates available in relevant studies and lie within the lowest limits of the intervals of these estimates. The externalities are incorporated gradually, over a five-year period beginning in 2000.

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Table IV-3 shows the results for the effects on demand and supply, considered overall. The impact on the real GDP is about 6% during the programming period and goes down through the continued effects of supply to a level below 2%, after the assumed cessation of payments after 2006. The third CSF stimulates investment in values ultimately exceeding 20%, and this makes it possible to raise demand at the same time through multiplying effects and productivity through the externalities resulting from the improvements in infrastructures, human capital and private capital. A rather surprising result is that, despite the considerable effect on the GDP, the effect on inflation is extremely low. In addition to the effects of supply which lead to the increase in total productivity of the factors and contribute towards restricting the increase in unit costs of labour, an additional explanation results from the participation by Portugal in the EMU which prevents inflation being reflected in a depreciation of the nominal exchange rate from which an additional reinforcement of the inflationary tendency would result.

Table IV- 3 Results of the HERMIN simulation

(Divergence from the basic situation without the third CSF in real terms, %) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP 6.37 6.09 5.98 5.92 6.03 6.36 6.01 2.00 1.90 1.82 1.75

Private consumption

6.24 6.18 6.05 5.92 5.94 6.18 5.82 1.89 1.69 1.62 1.57

Fixed investment

20.18 19.10 18.02 16.78 15.90 15.52 14.00 0.74 0.60 0.60 0.61

Employment 4.74 4.40 4.11 3.76 3.48 3.31 2.94 0.00 -0.01 -0.01 0.00 Level of prices 0.58 1.26 1.16 0.97 0.76 0.56 0.43 0.03 -0.41 -0.43 -0.41 Public deficit*+ 0.17 0.20 0.25 0.27 0.32 0.30 0.23 0.13 0.13 0.14 0.15 Balance of trade*

-2.36 -2.13 -1.94 -1.73 -1.54 -1.40 -1.22 0.34 0.29 0.26 0.23

* Divergence in percentage points of the GDP + A negative sign indicates lower deficits and a positive sign a higher deficit Source: ESRI

3.3 THE QUEST II SIMULATION The QUEST II model is the multi-country model of the cycle of economic activity and growth drawn up by the European Commission to analyse the economies of the Member States of the Union and their inter-relations with the rest of the world. The QUEST II model is a model of rational expectations which bases behavioural equations on the optimisation of families and undertakings. By contrast with other macroeconomic models, the real rates of interest and exchange are determined endogenously, and this makes it possible to consider any crowding-out effects. The supply of the economy is explicitly modelled on a neo-classical production function. The macroeconomic impact of the Structural Funds is modelled so as to reflect its effects in the growth of the “stock” of public capital, in relation to which it is assumed that the respective marginal product is 50% higher than that of private capital and, at the same time, that it possesses positive externalities. The results are presented in the form of divergence from the basic scenario, in other words in terms of what the performance would have been in the absence of the European Union’s Structural Funds and corresponding national public co-financing. The simulation operates on the basis that the payments cease to be made after 2006, so that only effects of supply continue to exist.

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The results of the QUEST II simulations for Greece, Spain, Ireland and Portugal in relation to the real GDP are generally low when compared with those of other models, due essentially to rational expectations combined with the endogenous determination of the real rates of interest and exchange. In the long term (from 5 years on), the increase in the GDP is higher than the short-term effects induced by the effects of demand, by virtue of the positive effects of supply, which are of a more permanent nature and continue to take place beyond the period of payments corresponding to the contributions of the CSF. The long-term effects on employment are modest, given the effect of the decrease in prices resulting from increases in productivity which, in turn, is reflected in a rise in real wages. As indicated in Table IV-4, the main result is reflected in a positive effect on the GDP which is sustained beyond the programming period through continued effects of supply. On a yearly average, the additional GDP between 2000 and 2006 is 1.2%. The relatively low multiplier of income of 0.2 in 2000, increasing to 1.0 in 2006, is a consequence of the extent to which the Portuguese economy is open to outside. This is reflected in a deterioration of the balance of trade of more than one percentage point in the initial years and the reduction in private investment, which is lowered by public investment instead of being complementary to it. The mechanism which generates these effects derives from the very strong world orientation of prices of Portuguese exports. Thus the assessment of the real rate of exchange (resulting from effects on the level of the prices) compresses profits and reduces private investment, whose growth only restarts after 7 or 8 years.

Table IV- 4 Results of the QUEST II simulation

(Divergence from the basic situation without the third CSF in real terms, %) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

GDP 0.78 0.74 0.80 1.07 1.43 1.78 2.04 1.80 2.16 2.21

Private consumption

1.06 1.61 1.47 1.43 1.42 1.45 1.42 1.15 1.25 1.25

Fixed investment

-1.18 -2.29 -2.20 -1.84 -1.45 -1.19 -0.84 0.05 0.54 0.70

Employment 0.22 0.22 0.14 0.14 0.18 0.24 0.31 0.27 0.31 0.34 Level of prices 0.46 0.53 0.18 -0.26 -0.69 -1.02 -1.33 -1.95 -2.10 -2.11 Public deficit*+

1.50 1.00 0.87 0.68 0.46 0.33 0.18 -0.59 -0.72 -0.75

Balance of trade*

-1.10 -1.59 -1.47 -1.33 -1.21 -1.11 -0.97 -0.07 -0.05 -0.05

* Divergence in percentage points of the GDP + A negative sign indicates a lower deficit and a positive sign a higher deficit Source: European Commission

4. IMPACT ON EMPLOYMENT AND SOCIAL COHESION The diagnosis of the situation which has been outlined and the strategic lines of the Plan enable strategic objectives whose pursuit is strongly associated with Priority 1 to be made clear: • employability and the improvement of employment, along the lines of fostering the basic

conditions for access to the labour market, guaranteeing conditions for the development of employment and adaptability to situations of permanent change;

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• the creation of employment, along the lines of creating new jobs for the public most affected

by situations of long-term unemployment (young people, unqualified active people possessing intermediate skills);

• work productivity along the lines of overcoming the shortcomings the country manifests in relation to the Community average;

• initiative and enterprise as essential conditions for active participation in economic and social life, in particular as regards the capacity to create new projects and activities generating new and better jobs;

• social development, along the lines of ensuring conditions of access to citizenship by vulnerable social groups, creating conditions for their social and economic integration and acting with anticipation on the set of factors which determine situations of exclusion.

Crossing of the analysis of the set of anticipated effects arising from the implementation of the operational programmes and the combination of strategic objectives enables a number of main conclusions to be identified:

• the marked impact of Priority 1 on the conditions of employability through the rise in the levels of scholastic education and skills among active persons, especially with the introduction of NITs, or New Information Technologies, in the context of initial and continued training, the reinforcement of the system of certifications and the improvement of the integration of the most vulnerable social groups;

• impact on the creation of employment and on the diversification of jobs, especially through measures supporting the socio-occupational integration of young people and the creation of self-employment and initiatives in the context of the social economy. However, the measures under Priority 2 make a more decisive contribution, inasmuch as it is in the economic fabric that the greatest potential for creating jobs lies. On the other hand, as regards territorial impact in connection with the creation of employment - a problematic situation in regions of less economic dynamism, especially inland - significant effects are not visible, these being boosted via the decentralised measures of the regional programmes;

• indirect incidence on the improvement of labour productivity, especially by virtue of the increase in initial and occupational skills;

• Lesser impact in connection with boosting capacities for initiative and enterprise, an area which is covered by support for the creation of own employment and business initiatives;

• Major impact as regards social development through preventive strategies, acting on a set of exclusion and curative factors via support for social integration, the improvement of access to a combination of goods and services in the field of health, education and employment, culture, information society and knowledge.

As far as impact on the public to be covered is concerned, there is the question of determining the real capacity of the programmes to reach specifically and in depth the public with the greatest needs and who have greater difficulty in accessing support – entrepreneurs and workers in micro-undertakings, particular public administration categories and disadvantaged social groups. From the territorial point of view, the foreseeable impact on territories and the capacity to develop dynamics for creating employment is not so clear, so there is the risk of seeing situations of periphery being aggravated in relation to more developed areas in the country. Finally, from the institutional point of view, the ex-ante evaluation called attention to the capacity of operational measures to play a fundamental role in consolidating the technical, material and organisational capacities of the educational, employment, social action and health systems.

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5. ENVIRONMENTAL IMPACT 5.1. By way of an initial finding, it is important to point out that the weaknesses of the Portuguese economy are invariably reflected in negative aspects from the environmental point of view, whether what are involved are strengths, weaknesses, opportunities or problems. The opposite is not, however, true: certain strengths of the economy can give rise to major environmental costs. To give only a few examples, one might mention the possibility of aggravation of the pressures of urban growth and rural desertification linked to economic growth and the process of nominal convergence; negative environmental impact associated with major infrastructure works; the intensification of road traffic linked to the strong dynamics of internationalisation of the distribution sector, etc. On the other hand, the effects of the opportunities of the Portuguese economy on the environment are positive, with the sole exception of tourist pressures with negative environmental repercussions associated with the development of this activity and, conversely, the areas at risk in the Portuguese economy also all appear worrying from the point of view of the reduction of environmental impact and improvement. Thus in Portugal, the environment appears to gain nothing from the stagnation, or even simply the bad performance, of the economy. The possibility of effectively utilising natural resources depends to a great extent on the levels of economic development, although these, in themselves, do not guarantee their implementation. Environmental sustainability must be a condition of economic development; yet it does entail a cost, which only the expansion of the economy makes bearable. 5.2. In the ex-ante evaluation, an attempt was nevertheless made to break down the different operational measures of the CSF into six development scenarios, namely:

(1) economic growth without any improvement in environmental efficiency;

(2) elimination of environmental impact factors (environmental cleanness);

(3) backing for the establishment of environmental infrastructures;

(4) support for compliance with existing environmental rules;

(5) improvement of efficiency in the use of resources in existing activities;

(6) promotion of new activities with lesser consumption of environmental resources. The results achieved deserve some comments. Thus, firstly, the intangible nature of many measures orientated towards the effective utilisation of human resources (in particular, the programmes Education, Employment, Training and Social Development, Science, Technology and Innovation, Information Society, Health and Culture) is not only unlikely to generate negative environmental impact but will allow the efficiency of production systems to be improved, making the incorporation of added value depend to a greater extent on work productivity linked to the increasing level of skills of the labour force, to the detriment of growing inputs in natural resources. On the other hand, the effective utilisation of human resources is an indispensable condition for the introduction of new production activities which are less dependent on the consumption of natural resources and energy. From the opposite viewpoint, the programmes Agriculture, Economics or Accessibility contain, mixed in with innovative initiatives which are favourable to the environment or simply neutral from this point of view, some proposals for investment which will certainly integrate in the first hypothesis provided for (Scenario 1): economic growth without any improvement in environmental efficiency. In these measures, the importance of the quality of management and selectiveness in the

157

approval of projects will make the difference and, with this in view, technical support for the management in question is essential. The overall contribution of the CSF to environmental sustainability will certainly be positive. It will not only give a significant boost to the promotion of new activities with less consumption of environmental resources (Scenario 6) but will significantly improve efficiency in the use of environmental resources (Scenario 5). And, even though it is considered that Portugal’s environmental problems require with greater urgency - given the backwardness to be seen in the country - investments in cleanness (Scenario 2), infrastructures (Scenario 3) or support for compliance with environmental rules (Scenario 4), the contribution of the more modest RDP is still significant. 5.3. Finally, the ex-ante evaluation undertook an analysis of the CSF in accordance with different environmental criteria classified, in descending order according to the criteria of the assessors, in three categories of importance:

- of major importance water resources urban environment coastal areas

- intermediate importance nature/biodiversity waste management landscape environmental education

- of minor importance climatic change air pollution

From this point of view, a general analysis of the different operational measures allows one to affirm that the nature of most of them is not likely to generate significant negative impact, whether direct or indirect. On the other hand, all the measures contain a set of measures and schemes which will necessarily be reflected in environmental benefits. In some cases (the Accessibility and Transport programme is a characteristic example), the same environmental criterion referred to above will suffer positive and negative effects although they are, of course, territorially differentiated. Under these conditions, we may emphasise: • the possible negative impact on water resources associated with the measures Agriculture and

Economy; • the contradictory effects of the operational measure Accessibility and Transport which could be

reflected in an increase in polluting private transport, in towns not covered by investments in public transport, particularly rail transport;

• the apparent absence of CSF effects on the coastal area, although the current trends towards the

pressures of development in this area increasing weigh heavily.

158

6. IMPACT ON EQUAL OPPORTUNITIES FOR MEN AND WOMEN 6.1. GENERAL ASPECTS In the course of the negotiations of the third CSF, it was possible to improve the Portuguese proposals substantially as regards equal opportunities for men and women by retaining, in particular, some of the suggestions in the ex-ante evaluation, especially by making this dimension of Community action a specific objective in Chapter II. On the understanding that the concept of equal opportunities has been devised around two key ideas – equity and citizenship – it must be understood as a way to assign equal social importance to different cultural nuances, acknowledging that the distinction between men and women stems from differences of kind and not gender (equity), and to regard as equal the capacity and possibility of decision-making, participation and intervention on the part of women and men in society (citizenship). With this in mind, two strategic dimensions can be identified which jointly lead to that equality: the first covers measures intended to promote equity, while the second encompasses measures which seek to attenuate inequalities. The measures included within the scope of this second dimension are generally reflected in positive measures, inasmuch as the former must normally take on a transversal nature vis-à-vis the various spheres of political action. An analysis is being developed of the operational programmes provided for in the third CSF with a view to the inclusion of equal opportunities as a transversal objective to the different sectoral and regional measures. The most explicit reference to equal opportunities is contained in one of the four objectives set out in the Employment, Training and Social Development programme, where the express aim is “to promote equal opportunities which, assumed as a strategic dimension (...) and being fundamentally expressed in a transversal way” encounters instruments of positive discrimination, mainly in support for undertakings, in this measure. In addition to this reference, the Information Society operational measure mentions the need to develop new forms of organisation, ensuring that development results with the guarantee of the promotion of social inclusion and equal opportunities. Covered by the extension of citizenship, via access to knowledge and information, this seems a very important reference. 6.2. EQUAL OPPORTUNITIES IN THE SECTORAL PROGRAMMES Education The intention to develop pre-schooling is the most important and positive aspect of this programme, including direct and indirect potential effects in connection with promoting equal opportunities. On the one hand, pre-schooling makes it possible to combat the inequality arising from traditional models and rules of family education marked by major distinctions between girls and boys (tasks, toys, expressions of affection, etc.) and on the other, partially resolving the problem of child care, it facilitates conciliation between employment and family tasks/responsibilies. A potentially negative aspect could be represented by the criteria for making use of higher education which are given as guidelines by the requirements and dynamism of economic activity and scientific and technological development, a nuance which consigns to second place the social sciences and humanities, branches where the presence of women is more expressive and where a major part of research on equal opportunities takes place.

159

Employment, Training and Social Development It is in this operational measure that concerns relating to the promotion of equal opportunities are concentrated. In addition to the explicit references already mentioned, other aspects of relevance in this perspective may be detected, among which making undertakings responsible in the promotion of employability through continuing education stands out positively. The measure in question is one which may be fundamental in ensuring equal access by men and women to professional qualification, to the extent that it makes it possible to carry out training at the workplace and during the normal work timetable. Also in this measure, however, are aspects which might well constitute obstacles to the promotion of equal opportunities, requiring particular attention when the programme is implemented: • the promotion of employability is seen essentially from the point of view of training, without

considering other factors which interfere directly with levels of employability, such as geographical mobility and the availability of time - aspects which substantially differentiate the situation of women and men on the labour market, not only at the level of obtaining employment but also where the development of professional careers is concerned;

• the increase in employment in the segment of social economy covers only the cooperative

sector, support for other sectors being crucial, in particular that of non-profit-making institutions, both with a view to the promotion of the employment of women and in the context of services rendered which correspond, in the majority of cases, to an advantageous exteriorisation of domestic labour.

Science, Technology and Innovation In the field of scientific and technological development, a set of overall guidelines is emerging which may contribute directly to the promotion of equal opportunities, inasmuch there is a clear indication of the importance of the social role of science. With this in mind, it is pointed out that the promotion of scientific and technological culture constitutes a key element for the promotion of equal opportunities, either in an overall perspective of access to knowledge or in more specific aspects, like fertility planning or the configuration of occupational expectations or the questioning of gender stereotypes. On the other hand, the promotion of scientific culture also seems important for fostering the development of knowledge in areas such as citizenship, family organisation or relations between the sexes. Information society The intention to develop a programme which strongly stimulates accessibility and participation in the knowledge and information society which was set out in the objectives and strategy section is one of the most efficient ways to promote citizenship and thereby equal opportunities. This intention is expressed firstly through the training and certification of basic skills in information technologies associated with compulsory schooling, an initiative which constitutes a priority means of encouraging women to enter a traditionally masculine sphere; secondly, through State intervention, in the form of creating conditions which lead to a substantial increase in the family market for computer products, facilitating equality between men and women in access to the information society, with reflexes in connection with strengthening citizenship and also in the development of new, occupationally important, skills; finally, through the stimulus of flexible entreprise (development of virtual networks, teleworking and simultaneous distance cooperative work), action which will allow new professional opportunities to be generated, inasmuch as it facilitates interlinking between employment and family tasks or responsibilities. 6.3. EQUAL OPPORTUNITIES IN THE REGIONAL PROGRAMMES In the regional programmes, three Directives stand out as instruments possibly capable of fostering equal opportunities indirectly: • in the context of the qualification and competitiveness of medium-sized towns, support for the

development of new activities, namely in connection with proximity services;

160

• in the metropolitan renewal priority, the establishment and running of temporary reception

centres which allow situations of risk or particularly vulnerable situations, among which are numerous instances of single parent families, to be dealt with in the short term; and

• still in this priority, the provision of social amenities with a view to the development of local

communities, directed especially at infants, young people, the elderly, vulnerable groups and situations of risk.

The realisation of any one of these three objectives takes on a major role from the perspective of conciliation between employment and family tasks or responsibilities; this proves particularly difficult in urban areas, and especially in suburban contexts.

161

CHAPTER V – FINANCING AND ADDITIONALITY

1 – FINANCING The financial programming of the Structural Funds (ERDF, ESF, EAGGF Guidance and FIFG) between 2000-2006 through Operational Programmes, corresponding to the uses set out in this Community Support Framework amounts to EUR 20 535 million (current prices). To this sum of Community Structural Fund financing are added the national public contributions, the overall volume of which is EUR 12 265 million (current prices). The average rate of Community co-financing is 62.6%. To the figures stated is added the financing from the Cohesion Fund, amounting in this period to EUR 3 299 million (current values). Estimating an average rate of co-financing of 60% in the case of investments supported by the Cohesion Fund, the overall sum of public investments corresponding to it is EUR 5 499 million (current prices). To Community financing by way of the Structural Funds and the Cohesion Fund must be added, for the period between 2000 and 2006, financing to be granted by the EIB, estimated at EUR 7 500 million (current prices) as additional support for the implementation of the development strategy drawn up, of which it has already been possible to identify EUR 1 427 million (amount referred to in Table 1). These investments will be able to include, in accordance with the EIB’s usual criteria, proposals for loans (or provisions of guarantees) relating to eligible investments not specifically provided for in the priorities of the third CSF The total sum of investments and measures for development to be carried out in Portugal between 2000 and 2006 under the Community Support Framework via Operational Programmes represents EUR 42 200 million (current prices). The investments supported by the Community Initiative Programmes will still have to be considered as appropriate.

The indicative breakdown of the financing integrated in the Community Support Framework in the period 2000 the 2006 by Main Priorities and Operational Programmes is set out in Table 1.

162

Tabl

e V-

1

CSF

200

0-06

– F

inan

cial

Pro

gram

min

g T

able

EUR

‘000

- cu

rren

t pric

es

Mai

n pr

iorit

ies

To

tal

Pub

lic e

xpen

ditu

re

Priv

ate

Co-

O

ther

fin-

EI

B

And

Cos

t To

tal

Stru

ctur

al F

unds

N

atio

nal p

ublic

reso

urce

s fin

- he

sion

an

cial

oper

atio

nal p

rogr

amm

es

Tota

l ER

DF

ESF

EAG

GF

FIFG

To

tal

Cen

tral

Reg

iona

l Lo

cal

Oth

er a)

an

cing

Fu

nd

inst

rum

ents

1=

2+13

2=

3+8

3=4a

7 4

5 6

7 8=

9a12

9

10

11

12

13

b)

Prio

rity

1 –

Impr

ovin

g sk

ills

amon

g th

e Po

rtug

uese

, pr

omot

ing

empl

oym

ent &

soc

ial

cohe

sion

7 09

4 74

5 6

728

423

4 26

6 82

6 1

696

805

2 57

0 02

1

2

461

597

1 43

0 67

24

036

50 5

4297

6 34

7 36

6 32

2

OP

Educ

atio

n 1

665

328

1 63

6 81

8 1

167

417

403

346

764

071

469

401

469

401

28

510

OP

Empl

oym

ent,

train

ing

&

s

ocia

l dev

elop

men

t 2

821

862

2 57

3 73

8 1

606

174

57 9

041

548

270

967

564

967

564

248

124

OP

Scie

nce,

tech

nolo

gy &

in

nova

tion

956

735

931

282

464

144

274

494

189

650

467

138

467

138

25

453

OP

Info

rmat

ion

soci

ety

625

035

625

035

316

239

261

341

54 8

98

30

8 79

625

1 87

44

036

44 1

038

783

OP

Hea

lth

698

318

634

083

475

574

462

442

13 1

32

15

8 50

915

8 50

9

64 2

35

O

P C

ultu

re

327

467

327

467

237

278

237

278

90 1

8983

750

6 43

9

Prio

rity

2 –

Mod

ifyin

g th

e pr

ofile

of

pro

duct

ion

tow

ards

act

iviti

es

of th

e fu

ture

13 1

09 5

60

6 09

4 08

5 4

131

581

2 53

3 12

533

7 93

71

097

200

163

319

1 96

2 50

41

426

850

10

2 33

843

3 31

6 7

015

475

85 4

20

OP

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ultu

re a

nd ru

ral

deve

lopm

ent

3 36

6 55

2 1

762

945

1 22

1 50

5 26

985

97 3

201

097

200

54

1 44

053

5 45

15

989

1

603

607

OP

Fish

erie

s 36

4 99

7 23

2 77

4 17

7 92

2 14

603

16

3 31

9 54

852

54 8

52

132

223

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P Ec

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378

011

4 09

8 36

6 2

732

154

2 49

1 53

724

0 61

7

1

366

212

836

547

96 3

4943

3 31

6 5

279

645

85 4

20

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rity

3 –

Asse

rtin

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e va

lue

of th

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nd a

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ortu

gal’s

ge

o-ec

onom

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on

3 82

4 49

4 3

515

456

1 72

1 04

1 1

721

041

1 79

4 41

51

507

823

286

592

309

038

3 19

1 36

8 16

229

OP

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ssib

ility

and

trans

port

3 36

8 47

7 3

071

916

1 38

8 38

5 1

388

385

1 68

3 53

11

396

939

286

592

296

561

1 61

0 87

9 16

229

OP

Envi

ronm

ent

456

017

443

540

332

656

332

656

110

884

110

884

12

477

1

580

489

Prio

rity

4 –

To p

rom

ote

the

sust

aina

ble

regi

onal

de

velo

pmen

t and

nat

iona

l co

hesi

on

15 2

74 9

76

14 1

87 0

06

8 97

7 78

2 6

440

793

1 46

2 46

11

020

153

54 3

75

5 20

9 22

42

245

955

485

476

1 02

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41

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029

1 08

7 97

0 10

8 06

8 1

488

1 23

4 29

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l OP

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th

4 64

0 56

0 4

327

296

2 71

7 59

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037

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583

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187

1 64

7 1

609

697

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896

283

137

433

664

315

264

1

488

217

733

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tre

2 85

9 82

2 2

693

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1 71

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289

630

213

176

206

181

1 53

7 98

2 79

748

6 57

027

0 37

322

5 85

4 16

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12

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2 73

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1 44

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8 91

0 43

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914

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garv

e 72

8 47

8 70

7 11

5 45

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5 45

748

681

37 4

45

1 75

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512

6 30

271

200

56 2

73

21 3

63

142

608

Reg

iona

l OP

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1 25

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9 1

098

114

854

441

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3 55

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930

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ra

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711

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100

821

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53

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62

381

978

9 09

227

2 26

750

875

49 7

44

100

071

86 4

53

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Tech

nica

l ass

ista

nce

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8 38

6 10

8 38

6 81

310

36

393

44 9

17

27

076

12 7

02

14

374

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tota

l CSF

39

412

161

30

633

356

19

178

540

12

428

157

4 41

5 33

62

117

353

217

694

11 4

54 8

166

624

002

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512

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164

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299

436

17 7

17

1 42

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9 Ef

ficie

ncy

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7 16

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311

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821

000

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028

189

013

90 6

40

9 31

9 49

0 36

128

3 56

220

955

50 3

7013

5 47

4 37

5 80

5

Prog

ram

min

g re

serv

e 1

100

376

855

275

535

460

335

537

116

598

75 5

23

7 80

2 31

9 81

518

4 94

013

667

32 8

5288

356

24

5 10

1

TOTA

L C

SF

42 1

99 7

03

32 7

99 9

92

20 5

35 0

00

13 2

95 7

224

720

947

2 28

3 51

6 23

4 81

5 12

264

992

7 09

2 50

452

4 13

41

259

866

3 38

8 48

8 9

399

711

3 29

9 43

6 17

717

1

427

559

ERD

F 28

165

260

21

831

434

13

295

722

13

295

722

00

8

535

712

5 12

4 48

939

6 02

21

187

350

1 82

7 85

1 6

333

826

ES

F 7

941

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7 32

9 67

6 4

720

947

04

720

947

0

2 60

8 72

997

7 81

529

815

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651

554

134

611

420

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229

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2 10

8 2

283

516

00

2 28

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6

1 03

8 59

293

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772

007

24 2

156

503

2 29

0 12

1

FIFG

48

1 11

8 31

6 77

4 23

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0

234

815

81 9

5954

333

26 2

901

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4

a ) Pu

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und

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s ho

ldin

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conc

essi

on, p

rivat

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dies

with

pub

lic c

apita

l, et

c.

b) O

ther

inst

rum

ents

: Eur

opea

n Ec

onom

ic A

rea

(EEA

), et

c.

163

CSF

200

0-06

- Fi

nanc

ial P

rogr

amm

ing

Tabl

e

EU

R ‘0

00 -

curr

ent p

rices

P

ublic

exp

endi

ture

Pr

ivat

e C

o-

Oth

er fi

n-

EIB

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d Ye

ar

Tota

l

Stru

ctur

al F

unds

Nat

iona

l pub

lic re

sour

ces

fin-

hesi

on

anci

al

R

egio

ns

Tota

l ER

DF

ESF

EAG

GF

FIFG

To

tal

Cen

tral

Reg

iona

l Lo

cal

Oth

er

anci

ng

Fund

in

stru

men

ts

1=2+

13

2=3+

8 3=

4a7

4 5

6 7

8=9a

12

9 10

11

12

13

2000

6

517

024

5 05

0 60

9 3

216

000

2 12

3 39

670

1 36

935

4 90

8 36

327

1

834

609

991

056

78 8

1119

5 31

856

9 42

4 1

466

415

449

273

509

249

536

E

ligib

le re

gion

s 5

098

077

3 90

4 97

8 2

553

000

1 70

2 41

753

4 58

528

5 53

7 30

461

1

351

978

692

420

78 8

1114

9 87

343

0 87

4 1

193

099

Reg

ions

in tr

ansi

tiona

l sys

tem

1

418

947

1 14

5 63

1 66

3 00

0 42

0 97

916

6 78

4 69

371

5

866

482

631

298

636

045

445

138

550

273

316

20

01

6 29

6 91

0 4

944

163

3 11

1 00

0 2

045

454

688

230

342

182

35 1

34

1 83

3 16

31

012

326

75 7

4019

8 54

654

6 55

1 1

352

747

494

943

2 46

5 26

0 32

1

Elig

ible

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ons

4 87

1 54

3 3

793

349

2 44

5 00

0 1

622

571

520

691

272

497

29 2

41

1 34

8 34

971

2 33

975

740

152

896

407

374

1 07

8 19

4

R

egio

ns in

tran

sitio

nal s

yste

m

1 42

5 36

7 1

150

814

666

000

422

883

167

539

69 6

85

5 89

3 48

4 81

429

9 98

70

45 6

5013

9 17

7 27

4 55

3

2002

6

208

611

4 86

6 28

1 3

001

000

1 96

1 69

867

5 83

132

9 55

7 33

914

1

865

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ions

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575

Sub-

tota

l CSF

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30

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ligib

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gion

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113

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701

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6

R

egio

ns in

tran

sitio

nal s

yste

m

6 16

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977

476

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ncy

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rve

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311

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000

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40

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128

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220

955

50 3

7013

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5 0

0 0

2004

59

3 89

9 46

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9 00

0

17

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2

132

287

20

05

604

174

469

598

294

000

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598

13

4 57

6

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48

9 09

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1 23

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0

14

2 15

1

108

942

Prog

ram

min

g re

serv

e 1

100

376

855

275

535

460

355

537

116

598

75 5

23

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9 81

518

4 94

013

667

32 8

5288

356

24

5 10

1 0

0 0

2004

40

9 94

8 31

8 63

5 19

9 48

8

11

9 14

7

91 3

13

20

05

402

755

313

044

195

986

117

058

89

711

2006

28

7 67

3 22

3 59

6 13

9 98

6

83

610

64

077

TOTA

L C

SF

42 1

99 7

03

32 7

99 9

92 2

0 53

5 00

0 13

295

722

4 72

0 94

72

283

516

234

815

12 2

64 9

927

092

504

524

134

1 25

9 86

63

388

488

9 39

9 71

1 3

299

436

17 7

17

1 42

7 55

9

164

As regards the regional breakdown of the financial programming of the Community Support Framework for the period 2000-2006 in relation to Structural Fund financing, Tables 2, 3 and 4 show the corresponding indicative breakdown in respect of total investment, public expenditure and Community financing. The financial sums relating to investments and development measures whose location is not defined at the outset were broken down proportionally by NUTS II.

Table V-2

Regionalisation of Total Investment (Structural Funds)

by Main priorities and Operational Measures 2000-06

(Billion euros - current prices)

TOTAL North Centre LVT Alentejo Algarve Azores Madeira

PRIORITY 1 7 094 745 3 351 713 1 785 796 837 188 635 493 378 583 60 022 45 950

Education 1 665 328 700 422 442 701 277 529 138 318 71 678 22 778 11 902

Employment, training & social development 2 821 862 1 717 380 609 707 0 325 405 169 370 0 0

Science, Technology & innovation 956 735 342 865 249 634 268 256 33 676 37 325 14 558 10 421

Information society 625 035 235 225 167 995 124 262 26 021 25 219 22 686 23 627

Health 698 318 237 490 207 813 103 142 83 190 66 683 0 0

Culture 327 467 118 331 107 946 63 999 28 883 8 308 0 0

PRIORITY 2 13 109 560 6 069 615 2 689 546 1 765 622 1 008 838 795 515 378 875 401 549

Agriculture and rural development 3 366 552 1 144 915 805 897 632 923 595 061 187 756 0 0

Fisheries 364 997 91 664 85 561 59 410 30 574 97 788 0 0

Economy 9 378 011 4 833 036 1 798 088 1 073 289 383 203 509 971 378 875 401 549

PRIORITY 3 3 824 494 1 218 271 1 021 585 812 826 410 868 360 944 0 0

Accessibility and transport 3 368 477 1 082 994 891 821 744 693 346 595 302 374 0 0

Environment 456 017 135 277 129 764 68 133 64 273 58 570 0 0

PRIORITY 4 15 274 976 4 640 560 2 859 822 2 732 494 1 868 103 728 478 1 258 759 1 186 760

North 4 640 560 4 640 560 0 0 0 0 0 0

Centre 2 859 822 0 2 859 822 0 0 0 0 0

Lisboa e Vale do Tejo 2 732 494 0 0 2 732 494 0 0 0 0

Alentejo 1 868 103 0 0 0 1 868 103 0 0 0

Algarve 728 478 0 0 0 0 728 478 0 0

Azores 1 258 759 0 0 0 0 0 1 258 759 0

Madeira 1 186 760 0 0 0 0 0 0 1 186 760

Technical assistance 108 386 44 558 26 116 16 837 11 462 6 899 1 258 1 256

Efficiency reserve 1 687 166 656 025 358 855 263 912 168 441 97 193 72 727 70 013

Programming reserve 1 100 376 427 852 234 052 172 125 109 861 63 389 47 434 45 663

TOTAL 42 199 703 16 408 594 8.975.772 6 601 004 4 213 066 2 431 001 1 819 075 1 751 191

165

Table V-3

Regionalisation of Total Investment (Structural Funds) by Main priorities and Operational Measures 2000-06 (Billion euros - current prices) TOTAL North Centre LVT Alentejo Algarve Azores Madeira

PRIORITY 1 6 728 423 3 146 149 1 697 177 819 674 599 512 359 958 60 011 45 942 Education 1 636 818 687 247 434 203 273 783 135 767 71 157 22 767 11 894

Employment, training & social development

2 573 738 1 566 372 556 096 0 296 792 154 478 0 0

Science, technology & innovation 931 282 328 142 244 643 262 517 33 676 37 325 14 558 10 421 Information society 625 035 235 225 167 995 124 262 26 021 25 219 22 686 23 627 Health 634 083 210 832 186 294 95 113 78 373 63 471 0 0 Culture 327 467 118 331 107 946 63 999 28 883 8 308 0 0

PRIORITY 2 6 094 085 2 634 142 1 449 059 859 756 506 848 344 177 147 342 152 761 Agriculture and rural development 1 762 945 566 851 504 687 297 602 288 866 104 939 0 0 Fisheries 232 774 58 448 54 558 37 922 19 498 62 348 0 0 Economy 4 098 366 2 008 843 889 814 524 232 198 484 176 890 147 342 152 761

PRIORITY 3 3 515 456 1 101 119 963 047 758 112 380 323 312 855 0 0 Accessibility and transport 3 071 916 970 068 837 426 692 141 317 213 255 068 0 0 Environment 443 540 131 051 125 621 65 971 63 110 57 787 0 0

PRIORITY 4 14 187 006 4 327 296 2 693 321 2 523 099 1 751 372 707 115 1 098 114 1 086 689 North 4 327 296 4 327 296 0 0 0 0 0 0 Centre 2 693 321 0 2 693 321 0 0 0 0 0 Lisboa e Vale do Tejo 2 523 099 0 0 2 523 099 0 0 0 0 Alentejo 1 751 372 0 0 0 1 751 372 0 0 0 Algarve 707 115 0 0 0 0 707 115 0 0 Azores 1 098 114 0 0 0 0 0 1 098 114 0 Madeira 1 086 689 0 0 0 0 0 0 1 086 689

Technical assistance 108 386 44 558 26 116 16 837 11 462 6 899 1 258 1 256

Efficiency reserve 1 311 361 478 712 293 926 212 615 138 602 74 338 55 875 57 293

Programming reserve 855 275 314 188 190 655 138 970 90 726 48 329 36 483 35 923

TOTAL 32 799 992 12 046 164 7 313 301 5 329 063 3 478 845 1 853 671 1 399 083 1 379 864

166

Table V-4

Regionalisation of Total Investment (Structural Funds)

by Main priorities and Operational Measures 2000-06

(Billion euros - current prices) TOTAL North Centre LVT Alentejo Algarve Azores Madeira

PRIORITY 1 4 266 826 2 003 913 1 088 157 483 403 390 194 235 277 37 704 28 178 Education 1 167 417 488 745 309 420 196 263 94 952 52 028 17 083 8 926

Employment, training & social development

1 606 174 977 514 347 039 0 185 217 96 404 0 0

Science, technology & innovation 464 144 170 932 127 359 116 037 17 457 19 358 7 571 5 430 Information society 316 239 119 845 83 655 60 090 12 125 13 652 13 050 13 822 Health 475 574 158 129 139 724 71 336 58 781 47 604 0 0 Culture 237 278 88 748 80 960 39 677 21 662 6 231 0 0

PRIORITY 2 4 131 581 1 845 309 916 228 582 898 336 563 241 934 101 366 107 283 Agriculture and rural development 1 221 505 407 350 318 823 219 056 205 339 70 937 0 0 Fisheries 177 922 44 656 41 678 29 056 14 899 47 633 0 0 Economy 2 732 154 1 393 303 555 727 334 786 116 325 123 364 101 366 107 283

PRIORITY 3 1 721 041 540 060 476 823 353 129 191 443 159 586 0 0 Accessibility and transport 1 388 385 441 772 382 607 303 650 144 110 116 246 0 0 Environment 332 656 98 288 94 216 49 479 47 333 43 340 0 0

PRIORITY 4 8 977 782 2 717 599 1 710 524 1 448 508 1 088 659 453 340 854 441 704 711 North 2 717 599 2 717 599 0 0 0 0 0 0 Centre 1 710 524 0 1 710 524 0 0 0 0 0 Lisboa e Vale do Tejo 1 448 508 0 0 1 448 508 0 0 0 0 Alentejo 1 088 659 0 0 0 1 088 659 0 0 0 Algarve 453 340 0 0 0 0 453 340 0 0 Azores 854 441 0 0 0 0 0 854 441 0 Madeira 704 711 0 0 0 0 0 0 704 711

Technical assistance 81 310 33 426 19 592 12 631 8 599 5 176 944 942

Efficiency reserve 821 000 305 665 180 279 123 312 86 278 46 888 42 571 36 007

Programming reserve 535 460 198 175 116 883 83 119 55 936 30 401 27 600 23 346

TOTAL 20 535 000 7 644 147 4 508 486 3 087 000 2 157 672 1 172 602 1 064 626 900 467

167

Table 5 sets out the indicative regional breakdown of Community financing in respect of each of the Structural Funds.

Table V-5 Indicative Regionalisation of Community Financing (Structural Funds)

by Structural Fund 2000-06 (Billion euros - current prices) TOTAL North Centre LVT Alentejo Algarve Azores Madeira

ERDF 12 428 157 4 522 588 2 801 349 1 829 047 1 183 965 744 442 721 097 625 669

ESF 4 415 336 1 988 727 880 099 724 635 391 470 203 894 110 880 115 631

EAGGF – O 2 117 353 585 991 489 755 301 399 425 685 101 116 133 553 79 854

FIFG 217 694 43 001 40 121 25 488 14 338 45 861 28 925 19 960

TOTAL excl. Reserves 19 178 540 7 140 307 4 211 324 2 880 569 2 015 458 1 095 313 994 455 841 114

Efficiency reserve 821 000 305 665 180 279 123 312 86 278 46 888 42 571 36 007

Programming reserve 535 460 198 175 116 883 83 119 55 936 30 401 27 600 23 346

TOTAL 20 535 000 7 644 147 4 508 486 3 087 000 2 157 672 1 172 602 1 064 626 900 467

This regional breakdown is indicative, with the exception of the amounts relating to the region of Lisboa e Vale do Tejo. The breakdown in terms of time of Community financing through the Community’s Structural Funds is set out in Table 6:

Table V-6

Time profile of Community Financing Operations2000-06 - Structural Funds

(Current prices)Million euros %

2000 3 216 15.7%

2001 3 111 15.1%

2002 3 001 14.6%

2003 2 885 14.0%

2004 2 762 13.5%

2005 2 818 13.7%

2006 2 742 13.4%

TOTAL 20 535 100.0% In accordance with Articles 6 and 16 of Council Regulation (EC) No 1260/1999 of 21 June 1999 on the system of transitional support4, the breakdown on a time basis of Community financing operation in Lisboa e Vale do Tejo is set out in Table 7.

4 Official title: ‘laying down general provisions on the Structural Funds’ – Translator.

168

Table V-7

Time Profile of Community Financing OperationsLisboa e Vale do Tejo 2000-06 - Structural Funds

(Current prices)Million euros %

2000 663 21.5%

2001 666 21.6%

2002 647 21.0%

2003 379 12.3%

2004 331 10.7%

2005 305 9.9%

2006 96 3.1%

TOTAL 3 087 100.0%

2 - VERIFICATION OF ADDITIONALITY The verification of additionality will have to take place at three points in time: ex-ante, mid-term and at the end of the period. 1. EX-ANTE VERIFICATION As indicated in Financial Table 8 and on the basis of the information supplied by the Portuguese authorities, the Commission and the Portuguese authorities determined the yearly average of eligible national public expenditure to be maintained in the period between 2000 and 2006 relating to the total of Objective 1 regions as being EUR 5109 million (at 1999 prices). This corresponds to an increase of 13.6% over average expenditure in the period between 1994 and 1999. The level of average yearly expenditure in the period between 2000 and 2006 is based on the estimate of the yearly general average of current total receipts of the SPA corresponding, in real terms, to 3.5%, which is consistent with the estimates included in the updated Stability Programme, assessed by the Commission and the Council at the beginning of the year 2000. The Portuguese authorities will supply adequate information to the Commission and will inform it, at any time during the programming period, of any developments liable to affect its capacity to maintain this level of expenditure. 2. MID-TERM VERIFICATION Three years after the approval of the programming document, but generally on a date not later than 31 December 2003, the Commission will have to have the possibility of carrying out the assessment in accordance with additionality requirements, as determined ex-ante. Additionality is considered to have been verified if the yearly average of eligible national public expenditure in the years between 2000 and 2002 has reached at least the level of expenditure stipulated ex-ante. The lack of information or the presentation of methodologically insufficient information will be considered a failure to comply with the stipulated criteria. The Portuguese authorities will provide information according to the following timescale:

169

• up to 31 July 2003: presentation of the total and of the yearly tables with final data relating to

the years 2000 and 2001, as well as provisional data referring to the year 2002; • up to 31 October 2003: if necessary, methodological improvements on the basis of the

Commission’s comments; • up to 31 December 2003: final deadline for the submission of any additional information. If the observance of these requirements is unsatisfactory, the Commission will not take a decision relating to mid-term reprogramming. In exceptional and justified cases, and with a view to preventing any delay in the programming process, the Commission will introduce a clause relating to the mid-term decision, suspending new commitments until the information relating to the mid-term verification of additionality has been supplied. The Portuguese authorities will inform the Monitoring Committee of the results of the verification. After mid-term verification and on the basis of the results obtained, the Portuguese authorities and the Commission will be able to reach agreement on the review of the level of expenditure envisaged for the remainder of the period, should the economic situation have given rise to developments in the current total receipts of the SPA which diverge significantly from the receipts anticipated ex-ante. In this case, an update of the 1994-1999 table which includes provisional or estimated data on the occasion of the ex-ante verification might be necessary. The request for a review can be made by the Member State or on the initiative of the Commission. 3. VERIFICATION AT THE END OF THE PERIOD A verification will be made before 31 December 2005. Additionality is considered to have been verified if the yearly average of the eligible national public expenditure relating to the years between 2000 and 2004 has at least reached the level of expenditure granted in the ex-ante verification or corrected at mid-term level. The lack of information or the presentation of methodologically insufficient information will be considered a failure to comply with the stipulated criteria. The Portuguese authorities will provide information according to the following timescale: • up to 31 July 2005: presentation of the total and of the yearly tables with final data relating to

the years 2000 to 2003, as well as provisional data referring to the year 2004; • up to 31 October 2005: if necessary, methodological improvements on the basis of the

Commission’s comments; • up to 31 December 2005: final deadline for the presentation of any additional information. The Portuguese authorities will inform the Monitoring Committee of the results of the verification, which will be taken into consideration in the preparations for the subsequent programming period.

170

Tabl

e V-

8

EL

IGIB

LE

OR

CO

MPA

RA

BLE

PU

BLI

C S

TR

UC

TUR

AL

EX

PEN

DIT

UR

E

U

nit:

Mill

ion

euro

s – 1

999

pric

es

YE

AR

LY

AV

ERA

GE

1994

-199

9 Y

EA

RLY

AV

ERA

GE

2000

-200

6

(199

9 pr

ices

) (1

999

pric

es)

To

tal

Of w

hich

: Pu

blic

un

derta

king

s (a

)

CSF

N

ot c

o-fin

ance

d

TOTA

L To

tal

Of w

hich

: Pu

blic

un

derta

king

s (a

)

CSF

N

ot c

o-fin

ance

d

TOTA

L

N

at. +

UE

Nat

. + U

E U

E N

at.

Nat

. N

at.

Nat

. + U

E N

at. +

UE

UE

Nat

. N

at.

Nat

. (1

) (2

=4+5

+6)

(3)

(4)

(5)

(6)

(7=5

+6)

(8=1

0+11

+12)

(9

) (1

0)

(11)

(1

2)

(13=

11+1

2)

1. B

asic

infr

astr

uctu

res

3.13

10.

892

0.75

30.

441

1.93

6 2.

377

3.24

1 0.

696

0.66

60.

628

1.94

7 2.

575

1.1

. Tr

ansp

ort/A

cess

ibili

ty/C

omm

unic

atio

ns

2.27

70.

725

0.44

30.

280

1.55

4 1.

834

2.34

1 0.

575

0.39

10.

443

1.50

7 1.

950

1.2

. Te

leco

mm

unic

atio

ns/In

form

atio

n so

ciet

y

0.11

50.

109

0.05

50.

060

0.00

0 0.

060

0.23

3 0.

005

0.08

70.

123

0.02

3 0.

146

1.3

. En

viro

nmen

t/Wat

er

0.51

80.

057

0.17

90.

077

0.26

3 0.

340

0.41

0 0.

116

0.07

60.

025

0.30

9 0.

334

1.4

. H

ealth

0.

220

0.00

0 0.

076

0.02

4 0.

119

0.14

4 0.

257

0.00

00.

111

0.03

7 0.

109

0.14

6

2.

Hum

an r

esou

rces

1.

634

0.03

4 0.

752

0.26

1 0.

621

0.88

3 1.

887

0.00

00.

794

0.45

9 0.

633

1.09

2 2

.1.

Educ

atio

n/Sp

ort

0.71

30.

018

0.27

00.

099

0.34

3 0.

442

0.83

0 0.

000

0.33

40.

153

0.34

3 0.

496

2.2

. Tr

aini

ng, E

mpl

oym

ent &

Soc

ial d

evel

opm

ent

0.79

80.

009

0.40

90.

137

0.25

2 0.

389

0.88

7 0.

000

0.38

60.

231

0.26

9 0.

500

2.3

. R

&D

and

Inno

vatio

n 0.

123

0.00

6 0.

072

0.02

6 0.

026

0.05

1 0.

170

0.00

00.

074

0.07

5 0.

021

0.09

6

3.

Pro

duct

ion

fabr

ic

1.61

80.

302

0.93

20.

439

0.24

7 0.

686

1.98

2 0.

638

1.05

10.

560

0.37

1 0.

931

3.1

. A

gric

ultu

re/R

ural

dev

elop

men

t/Fis

herie

s 0.

591

0.02

6 0.

352

0.12

1 0.

118

0.23

9 0.

664

0.04

50.

354

0.15

4 0.

155

0.31

0 3

.2.

Indu

stry

, Ene

rgy,

Ser

vice

s and

Tou

rism

1.

028

0.27

6 0.

580

0.31

8 0.

130

0.44

8 1.

318

0.59

30.

697

0.40

6 0.

216

0.62

1

4.

Oth

er

0.66

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CHAPTER VI – PARTNERSHIP Under the terms of Article 8(1) of Council Regulation (EC) No 1260/1999 of 21 June 1999, it is the responsibility of the Member State to designate, in accordance with the respective national rules and current practices, the most representative partners at national, regional, local or other level, so as to ensure the effective exercise of the partnership, guaranteeing a wide and effective association of all the competent public authorities and economic and social partners in the various stages in the preparation and implementation of the CSF. All the public authorities, economic and social partners and the other bodies associated with the various stages in the preparation and implementation of the CSF are, in this context, designated “partners” and will act in the capacity of partners pursuing a common objective. When preparing its Regional Development Plan, Portugal developed an extensive process of associating economic and social partners, regional and local authorities and other public bodies which will have to have an effective follow-up and, desirably, be taken further during the implementation of the CSF. Within this framework, the Committees for the Follow-up of the Community Support Framework and the Sectoral and Regional Operational Measures will systematically include representatives of social partners; without prejudice to the designation of their representatives by the Economic and Social Council and any other bodies involved in concerted social action, the Member State must ensure wide and efficient association, at national, regional and local level, of Non-Governmental Organisations, namely in the spheres of environmental protection, social and local development and the promotion of equal opportunities. The management authorities of the CSF and the Operational Programmes will be able to carry out suitable initiatives to deepen the partnership during the implementation of the CSF. The CSF management authority will advise the European Commission of developments in this connection.

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CHAPTER VII – IMPLEMENTING PROVISIONS

1 MANAGEMENT AND MONITORING MANAGEMENT OF THE CSF BY THE MANAGEMENT AUTHORITY The management authority for the Community Support Framework provided for in Article 17 (d) of Council Regulation (EC) 1260/99 of 21 June 1999 is the Management Committee of the Community Support Framework, a collegiate body composed of directors of the bodies responsible for the management of each Structural Funds and for the Cohesion Fund, chaired by the national interlocutor of the ERDF, represented by the Director-General for Regional Development. The Management Committee of the Community Support Framework is responsible for the efficiency and regularity of management and implementation, in particular as regards the provisions of Article 34 of Council Regulation (EC) 1260/99 of 21 June 1999, and especially: - the establishment and operation of a mechanism for the collection and processing of reliable

physical, financial and statistical data on implementation, for the quantification and updating of monitoring indicators, for mid-term and ex-post evaluation and for the transmission of these data to the European Commission using computerised systems;

- the preparation and, after approval from the Monitoring Committee, the presentation of the yearly reports on the implementation of the CSF to the European Commission and the adoption of measures in line with any observations from the European Commission;

- the preparation and sending to the European Commission of the final report on the implementation of the Community Support Framework;

- the organisation, in cooperation with the European Commission, of the mid-term evaluation and of its updating;

- the use by the bodies that participate in the management and implementation of the Operational Programmes of systems of accounting suited to the separation in the accounting of all transactions, for the regularity of operations financed and for internal control which are compatible with the principles of sound financial management;

- the collection and the making available of the information needed for the verification of additionality;

- compatibility with Community policies, in particular as regards compliance with the rules on competition, the award of public contracts, the protection and improvement of the environment, the promotion of equality between men and women and compliance with obligations in respect of information and publicity;

- analysis of the criteria for the distribution of projects co-financed by sectoral operational measures and regional operational measures.

The CSF Management Committee is assisted in its work by a technical support unit which works with the Director-General for Regional Development. The CSF Management Committee may meet all or some of the managers of the Operational Programmes and has to meet periodically with the managers of the Regional Operational Programmes for continental Portugal.

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During the yearly meeting between the European Commission and the management authority provided for in Article 34 of EC Regulation 1260/99, the efficiency of the interlinking of the sectoral measures of the national programmes with those of the regional programmes will be examined in addition to the analysis of the main results of the previous year. The Member State will appoint, under Article 9(a) of Regulation (EC) 1260/99, a national payment authority for each of the Structural Funds and the Cohesion Fund. The financial flows relating to the contribution of the Structural Funds to the Operational Measures of the Community Support Framework for 2000-2006 will follow the following circuit: Community contributions will be credited by the European Commission departments direct to specific bank accounts created by the Member State together with the Directorate-General for the Treasury and which will correspond to each of the payment authorities. The payment authority will be responsible for making direct transfers, under the advancing or reimbursement system, to the manager of each Operational Programme. The manager will transfer the sums, after confirmation of the documentary evidence of expenditure associated with each request for payment, to the final beneficiaries under the programme, understood as described in Article 9(l) of Council Regulation (EC) 1260/99 of 21 June 1999. In accordance with Article 32 of EC Regulation No 1260/99, forecasts of payments to be made in the current and following year will have to be sent yearlyly. MONITORING OF THE CSF Responsibility for monitoring the Community Support Framework lies with a collegiate body designated the CSF Monitoring Committee, chaired by the Chairman of the Management Committee for the Community Framework and composed of: a) actual members of the CSF Management Committee;

b) managers of the Operational Programmes;

c) a representative of the Ministry for the Environment and Town and Country Planning;

d) a representative of the Ministry for Equality;

e) the Director-General of the Treasury;

f) the Director-General of Community Matters;

g) the Director-General of the Department for Prospective Studies and Planning;

h) Directors of administration departments, where the nature of the matter to be dealt with so requires;

i) the Chairman of each Regional Council;

j) a representative of each Regional Government;

k) a representative of the National Association of Portuguese Municipalities;

l) the Chairman of each Regional Coordination Committee;

m) a representative of the General Finance Inspectorate , as an observer;

n) representatives of economic and social partners especially designated by the Economic and Social Council;

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o) representatives of the European Commission and the European Investment Bank, in accordance

with Regulation (EC) 1260/99 of 21 June 1999. The Member State can adjust the composition of the CSF Monitoring Committee, with the agreement of the European Commission. The Monitoring Committee will be constituted no later than three months after the Commission’s decision approving the present Community Support Framework. The Monitoring Committee will draw up its internal rules under the institutional, legal and financial system of the Member State. In these internal rules, the procedures for its operation will be laid down, with the agreement of the management authority. The Monitoring Committee will ensure the efficiency and quality of the implementation of the Community Support Framework in the following areas of competence: a) monitoring the implementation of the CSF and all the Operational Programmes, guaranteeing

their interlinking with Community policy.

b) assessing the progress made in the pursuit of the general and specific objectives of the CSF.

c) analysing the results of the implementation of the CSF and also the respective mid-term evaluation.

d) ensuring cohesion and complementarity between the processes of assessing the CSF and the Operational Programmes and the transversal or thematic assessments to be carried out under the ESF;

e) transversally monitoring the various Operational Programmes, in particular in the case of the spheres of health, information society, equal opportunities, human resources and SMUs/competitiveness/innovation1/skills.

f) analysing and approving the yearly report on implementation and the final report on the implementation of the CSF before their submission to the European Commission.

g) analysing and approving all the proposals for changing the content of the European Commission decision approving the CSF.

h) proposing to the Management Committee measures necessary for perfecting the management of the CSF and the Operational Programmes.

With the objective of ensuring follow-up in matters of a transversal nature for the various Operational Programmes in the context and under the guidance of the CSF Monitoring Committee, thematic working parties will operate in the following spheres:

- environment; - equal opportunities; - information society; - SMUs/competitiveness/innovation/qualifications; - human resources; - health.

Thematic working parties will ensure the selected spheres are monitored, identifying the problems and difficulties that occur, will promote interlinking between programmes and will submit to the Monitoring Committee proposals for resolving problems and improvements to be introduced in management and interlinking.

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Thematic working parties will meet at least yearly and their activities will be the subject of reports to be submitted to the CSF Monitoring Committee. The terms of reference, composition and rules relating to the operation of each thematic working party will be drawn up by the Monitoring Committee, in collaboration with the Commission and the Member State. The spheres selected will correspond to specific outputs of the information system of the CSF so as to make relevant information available on the corresponding physical and financial implementation and allow transversal analyses at the time of the mid-term evaluation and ex-post analyses. MANAGEMENT OF THE OPERATIONAL PROGRAMMES Management of each of the Operational Programmes will be exercised by a manager, who corresponds to the management authority provided for in Article 18(d)(i) of Council Regulation (EC) 1260/99 of 21 June 1999. It is the responsibility of the managers of the Operational Programmes to: a) adopt the programme complement laid down in Article 9(m) of Regulation (EC) 1260/99, after

the agreement of the Monitoring Committee;

b) transmit to the Commission, in a single document for information, the Programme complement within the maximum period of three months as from the Commission Decision approving the Operational Programme;

c) adapt, on its own initiative or on a proposal from the Monitoring Committee, the programme complement without modifying the total sum of the contribution from the Structural Funds granted to the Priority in question or its objectives;

d) inform the European Commission of the adaptation of the Programme complement, within a maximum period of one month after the approval by the Monitoring Committee;

e) guarantee the regularity of the operations financed by the Operational Programme, particularly by the application of internal control measures compatible with the principles of good financial management, and also by the response to the observations, requests for corrective measures and recommendations for adaptation submitted by the European Commission in accordance with Article 34(2) and Article 38(4) of Council Regulation (EC) 1260/99 of 21 June 1999;

f) propose the regulations and organise the application papers in respect of projects for financing by the respective Operational Programme;

g) approve or propose the approval of applications for projects for financing by the respective Operational Programme, once the opinion of the corresponding Management Unit has been obtained;

h) ensure compliance on the part of each project or measure with applicable national and Community rules, in particular its compatibility with Community policy as regards compliance with competition rules, the award of public contracts, the protection and improvement of the environment and the promotion of equality between men and women;

i) ensure that the necessary conditions for budgetary coverage of the projects are met;

j) assess the conformity of any requests for payments submitted by final beneficiaries and make the said payments, or ensure that they are made;

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k) draw up and submit to the Monitoring Committee the yearly reports and final report of implementation of the Operational Programme;

l) ensure that a system of suitable internal control suitable for checking application papers and payments in accordance with the regulations applicable is set up;

m) collect and process reliable physical, financial and statistical data on implementation for the preparation of monitoring indicators and the mid-term and ex-post evaluation and for any thematic or transversal assessments;

n) use, and ensure the use by the bodies participating in management and implementation of, a system of separate accounting or an accounting codification suitable for transactions covered by the Operational Programme;

o) ensure compliance with national and Community obligations relating to information and publicity;

p) organise the mid-term evaluation and its updating, in collaboration with the Commission, and collaborate in the ex-post evaluation of the respective Operational Programme;

q) submit the yearly implementation report and the final implementation report on the Operational Programme to the European Commission, after its approval by the Monitoring Committee;

r) carry out the acts necessary for the due and full implementation of the Operational Programme. The functions of the manager of each Operational Programme are performed with the support of a Management Unit chaired by the manager. The Management Units relating to sectoral and regional Operational Programmes with a direct incidence on environmental matters or with a structuring incidence on town and country planning are supplemented by a representative of the Ministry for the Environment and Town and Country Planning. Each manager will be assisted in the exercise of his functions by Technical Support Units. Specific aspects relating to the management of the Regional Operational Programmes are laid down in the following paragraphs in the case of continental Portugal and in the respective Operational Programmes as regards the Autonomous Regions of the Azores and Madeira. MANAGEMENT OF MAINLAND REGIONAL OPERATIONAL PROGRAMMES Each manager of a mainland Regional Operational Programme can be supported in the exercise of his functions by managers of main priorities. However, in the case of the priority relating to regionally decentralised central government measures, the functions of the manager are performed directly by the manager of the Regional Operational Programme. The manager of the Regional Operational Programme will submit the financing projects approved under the priority relating to regionally decentralised central government measures for approval by the Minister for the sectoral area concerned. Each of the territorially-based integrated measures and regionally decentralised sectoral components is administered by a coordinator. Coordinators of the regionally decentralised sectoral components have exclusive capacity for initiative as regards the submission of proposals for decisions to the Management Unit in the relevant sector and ensure it is consistent with national sectoral priorities and interlinked with the sectoral Operational Programmes.

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The composition of the Management Units for mainland Regional Operational Programmes ensures that the local autarchies involved are represented. The Management Units for the main priorities relating to territorially-based integrated measures include the coordinators of those measures. The Management Units for the main priorities relating to regionally decentralised central government measures include the coordinators of the regionally decentralised sectoral components who are appointed by the Minister for the sector concerned. MONITORING OF THE OPERATIONAL PROGRAMMES Each Operational Programme is monitored by a Monitoring Committee created by the Member State, set up within the 3-month deadline following the European Commission decision approving the Operational Programme and chaired by the Manager of the Operational Programme. It is composed of: a) members of the Management Unit for the Operational Programme;

b) representatives of the bodies responsible for the national management of the Community funds involved;

c) a representative of the Ministry for the Environment and Town and Country Planning, when he is not a member of the Management Unit;

d) a representative of the Ministry for Equality;

e) representatives of Ministries who come from institutions dealing in technical support for the formulation of, and support for, relevant public policies;

f) the regional coordinators of the respective decentralised sectoral components;

g) representatives of economic and social partners, and especially those recommended by the Conselho Economico e Social;

h) representative of the European Commission and the European Investment Bank, in accordance with Regulation (EC) 1260/99 of 21 June 1999.

i) a representative of the General Finance Inspectorate, as an observer; It is the special responsibility of the Monitoring Committee for the Operational Programme to: a) confirm or adapt the Programme complement, including the physical and financial indicators to

be used in monitoring the Operational Programme;

b) analyse and approve, in the six months following the approval of the Operational Programme, the criteria for the selection of the operations financed under each measure;

c) evaluate periodically the progress made in pursuit of the specific objectives of the Operational Programme;

d) analyse the results of implementation, in particular the implementation of the objectives laid down for the different measures, and also the mid-term evaluation provided for in Article 42 of Regulation (EC) 1260/99 of 21 June 1999;

e) analyse and approve the yearly implementation report and the final implementation report before they are sent to the European Commission;

f) analyse and approve all the proposals for change to the content of the European Commission decision approving the Operational Programme;

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g) propose to the manager the adaptation or review of the Operational Programme which makes it possible to achieve the objectives laid down or perfect the relevant management, including the financial aspect;

h) analyse the criteria for apportionment between national sectoral projects and regional sectoral projects.

Specific aspects relating to the monitoring of the Regional Operational Programmes are laid down in the following paragraphs in the case of continental Portugal and in the respective Operational Programmes as regards the Autonomous Regions. MONITORING OF MAINLAND PORTUGAL REGIONAL OPERATIONAL PROGRAMMES Each Mainland Regional Operational Programme is monitored by a Monitoring Committee created by the Member State, set up within the 3-month deadline following the European Commission decision approving the Operational Programme and chaired by the Manager of the Operational Programme. It is composed of: a) members of the Management Unit for the Operational Programme and the Management Units

for the Main Priorities;

b) representatives of the bodies responsible for the national management of the Community funds involved;

c) a representative of the Ministry for the Environment and Town and Country Planning, when he is not a member of the Management Unit;

d) a representative of the Ministry for Equality;

e) the Chairman of the Regional Coordination Committee;

f) the Chairman of the Regional Council;

g) representatives of the municipalities concerned;

h) representatives of Ministries who come from institutions dealing in technical support for the formulation of, and support for, relevant public policies;

i) representatives of economic and social partners, and especially those recommended by the Conselho Economico e Social and any other social joint action bodies;

j) representatives of the European Commission and the European Investment Bank, in accordance with Regulation (EC) 1260/99 of 21 June 1999;

k) a representative of the General Finance Inspectorate, as an observer;

2 – EVALUATION OF THE COMMUNITY SUPPORT FRAMEWORK AND OPERATIONAL PROGRAMMES

MID-TERM EVALUATION In accordance with Articles 40 and 42 of Regulation (EC) 1260/99 of 21 June 1999, the mid-term evaluation will analyse, bearing in mind the ex-ante evaluation, the initial results of the Community Support Framework and the Operational Programmes, their relevance and the implementation of the objectives, assessing also the use of the appropriations and the operation of implementation and monitoring.

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The mid-term evaluation is carried out at Community Support Framework level and each Operational Programme level under the responsibility of the management authority in collaboration with the European Commission and the Member State. This evaluation will be carried out by independent assessors, submitted to the Monitoring Committee for the Community Support Framework or Operational Programme and subsequently forwarded to the European Commission by 31 December 2003 at the latest. As an extension to the mid-term evaluation, an updating of this evaluation will be carried out up to 31 December 2005 in the case of the Community Support Framework and each Operational Programme. With the objective of ensuring compliance with the schedules laid down in the above paragraphs, the management authorities for the Community Support Framework and for each Operational Programme will, in collaboration with the European Commission and the Member State, select independent assessors until the end of 2002 and 2004 respectively. Without prejudice to the powers of the management authority for the Community Support Framework and for each Operational Programme, the corresponding Monitoring Committees will have to be involved in the preparation of the mid-term evaluation, in particular by setting up Technical Evaluation Groups or other bodies that guarantee the principle of collaboration between the management authorities and the European Commission. EX-POST EVALUATION In accordance with Articles 40 and 43 of Regulation (EC) 1260/99 of 21 June 1999, ex-post evaluation is intended to give an account of the use of resources, of the effectiveness of measures and their impact and to learn lessons for the economic and social cohesion policy, bearing in mind the results of the ex-ante evaluation. This evaluation applies to factors of success or failure of implementation and also to performance and results, including their sustainability. Ex-post evaluation is the responsibility of the European Commission, in collaboration with the Member State and with the management authority; it applies to measures and is carried out by independent assessors; this evaluation must be concluded no later than three years after the conclusion of the programming period. GENERAL GUIDELINES The Member State and the management authority will authorise all the data necessary for the implementation of the evaluations, adopting the necessary measures for this information to be made available to the independent assessors. The latter must observe confidentiality when handling the data to which they have access. Evaluation of the CSF and the Operational Programmes will be interlinked with the CSF System of Overall Information and with the Specific Information Systems of each Structural Fund and will take into account the evaluation mechanisms drawn up, in particular the ESF’s Permanent Evaluation Unit. On the initiative of the Member State or the European Commission, after the former has been informed, supplementary - possibly thematic - evaluations may be embarked on, in particular to identify transferable experiences.

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The Member State and the European Commission will provide themselves with suitable funds and bring together all the necessary data for the evaluations to be carried out in the most efficient way. The evaluation will use, in this context, the different data that the monitoring system can provide, supplemented if necessary by the collection of information intended to improve their relevance. The evaluation results will be made available to the public on request, with the necessary prior agreement of the Monitoring Committee being safeguarded in the case of the mid-term evaluation.

3 – FINANCIAL CONTROL AND IRREGULARITIES In accordance with Article 38(1) of Council Regulation (EC) 1260/99 of 21 June 1999, the Member State is the primary party responsible for the financial control of the CSF, in close cooperation with the European Commission, in order to ensure that Community funds are correctly and efficiently employed in accordance with the principles of sound financial management. In this context, the Member State is especially responsible for the following obligations: - the establishment and operation of management and control systems in order to ensure

regularity and efficiency in the use of Community funds; - the prevention, detection and correction of irregularities in accordance with the Community

regulations applicable - communication to the Commission of the irregularities detected, and also the updating of the

information on administrative and legal processes given rise to; - the recovery of Funds employed irregularly following an administrative or legal process

instituted for the purpose, and also the application of deferred interest arising in accordance with the relevant legislation;

- certification that the declarations of expenditure submitted to the European Commission are

accurate and that they arise from on accounting systems based on supporting documents which can be verified;

- submission to the European Commission, after the closure of the operational programmes, of a

declaration issued by a person or service functionally independent of the appointed management authority which certifies the validity of the order of payment of the balance and the legality and regularity of the transactions covered by the final certificate of expenditure. This declaration may be accompanied by an opinion drawn up by the Member State’s services responsible for management and control systems;

- the fulfilment, as and when appropriate, of all the obligations arising from Community

regulations applicable to this subject. In accordance with Article 34 of Council Regulation (EC) No 1260/99 of 21 June 1999, the management authority is responsible for the regularity of co-financed operations and for the application of the internal control system compatible with sound financial management, and also for analysis and response to observations and requests for corrective measures submitted by the European Commission under Article 38(1)(4) or the recommendations for adjustment formulated under Article 34(2) of that Regulation.

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In accordance with its financial control obligations, the Member State will have available a system for the control of the Structural Funds organised at three levels: a) First level control is internal and accordingly constitutes an area of competence of the

management authorities. It includes inspection of the projects in their material, financial and accounting components, whether at the location of implementation of the investment and measures or at the bodies holding the originals of the technical dossiers and documents showing expenditure. These powers will have to be directly exercised, with audit firms or others with the capacity to carry out tasks relating to the physical, financial and accounting control of supported projects being able to be subcontracted. First level control will be exercised by managing bodies which must, whenever situations become more complex, request support from the national body responsible for the Fund in question;

b) The second level is directed at external control of management. It covers the analysis and

evaluation of the first level control system and, whenever it proves necessary to test its efficiency, checking on decisions taken by management bodies and checking on final beneficiaries as well as cross-checking other bodies involved in order to have access to the information regarded as necessary for clarification of the facts which are the subject of control. Second level control will have to be exercised directly by the respective national interlocutors of the Community funds or by control bodies expressly appointed for the purpose, in close liaison with the competent departments responsible for control under the various Ministries, as long as it adheres to the specific areas of action of the latter. In the context of the control of measures financed by the Community funds, recourse may be had to subcontracting outside auditors of a specific nature and with specific objectives;

c) High level control, corresponding to the overall coordination of the control system,

responsibility for which will lie with the General Finance Inspectorate, will take the form of interlinking and coordinating the activities carried out in this context by the various services and bodies which intervene in the system for the control of the Structural Funds, by the evaluation of the first and second level management and control systems and by interaction with the Community control institutions, and especially the communication of the irregularities detected by the control system in the competent services of the European Commission within the statutorily applicable deadlines.

Control of measures co-financed by the Structural Funds in the Autonomous Regions is carried out by bodies appointed by the respective regional governments without prejudice to the powers assigned to national bodies. The European Commission, in its capacity as the body responsible for the proper implementation of the general budget of the European Communities, will certify the existence and reliable operation of the Member State’s management and control systems in accordance with Article 38(2) of Regulation (EC) 1260/99. The competent services of the European Commission, in partnership with the management authority for the Community Support Framework and the body responsible for the overall coordination of the financial control system, carry out a yearly examination of the operation of the control system, before the examination provided for in Article 34(2) of that Regulation. Observations and any corrective measures will be conveyed to the management authority, in accordance with Article 38(4), (5) and (6) of that Regulation. The competent services of the European Commission can also request the Member State to carry out spot checks to verify the regularity of one or more operations; in these control measures, employees or agents of the European Commission can participate, in accordance with Article 38(2) of Regulation (EC) 1260/99.

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After accurate verification, the European Commission may decide to suspend all or part of an intermediate payment should a serious irregularity that has not been corrected and for which immediate action is justified in accordance with Article 38(5) of Regulation (EC) 1260/99 occur in the expenditure in question, and this may be followed by the procedure provided for in Article 39 of that Regulation if the assumptions are found to be true. The European Commission will inform the Member State of the measures to take and the respective basis for them within the statutorily applicable deadlines. In accordance with Article 39(3) of Regulation (EC) 1260/99, in the case of serious irregularities within the deadline laid down by the Commission and in the absence of an agreement or of corrections made by the Member State, the European Commission may decide, within a maximum period of three months and bearing in mind any observations by the Member State, to make the necessary financial corrections, discontinuing in full or in part any contribution from the Structural Funds to the measure in question. The interest generated by the bank accounts through which the Structural Fund payments are made must be budgeted as receipts. The form of accounting of the interest must allow sufficient control on the part of the national authorities and the Community institutions. The use of the interest must be compatible with the objectives of the Structural measures and must be subjected to the specific mechanisms for the control of public funds in Portugal. The management authorities must retain for a period of three years following payment by the European Commission of the balance relating to each Operational Programme, all supporting data relating to the respective expenditure and controls, in accordance with Article 38(6) of Regulation (EC) 1260/99.

4 – COMPATIBILITY WITH OTHER COMMUNITY POLICIES In accordance with Article 12 of Council Regulation (EC) 1260/99, operations financed by the Structural Funds, the European Investment Bank or any other Community financial instrument must comply with the Treaty and the acts adopted pursuant thereto, and also with Community policies and measures, including those relating to competition rules, the award of public contracts, the protection and improvement of the environment, the elimination of inequalities and the promotion of equality between men and women. In this connection, the following principles must be considered: COMPETITION RULES Community co-financing of state aid systems to undertakings must comply with the relevant Community legislation, in particular that provided for in the Treaty. The Member State will notify the European Commission of measures which institute, modify or extend state aid systems to undertakings, within the statutorily applicable deadlines. AWARD OF PUBLIC LAW CONTRACTS The schemes or measures co-financed by the Structural Funds are carried out in accordance with Community policy as regards the award of public contracts.

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Notices sent for publication in the Official Journal of the European Communities will specify references to projects relating to that the granting of a Community contribution has been requested or decided on. Requests for a contribution relating to the major projects laid down in Articles 25 and 26 of Council Regulation (EC) No 1260/99 must include the exhaustive list of contracts already awarded, and also the respective acts whenever provided for by “public contract” Directives. An update of this information with the request for payment of the balance relating to the contracts awarded will be forwarded to the European Commission. In relation to the other projects included, in particular in the Operational Programmes, and whose overall value exceeds the limits laid down in Article 25 of Council Regulation (EC) No 1260/99, the record of each contract awarded will be kept at the disposal of the Monitoring Committee, since “public law contracts” are provided for in Directives. ENVIRONMENTAL PROTECTION The schemes and measures co-financed by the Structural Funds must take account of the principles and objectives of sustainable development, reflected in concrete form in the Community programme of policy and action in relation to the environment and sustainable development referred to in the Council Resolution of 1992, and must also comply with Community environment legislation. In the case of programmes and other measures which may have a significant impact on the environment, the Member State must provide the European Commission with the request for a contribution and, in accordance with Article 41(b) of Council Regulation (EC) 1260/99, suitable information whereby it can evaluate the effects on the environment. Requests for contributions relating to the major projects referred to in Article 25 of Council Regulation (EC) 1260/99 will be supported in accordance with Article 26 (g) by data allowing environmental impact and the application of the principles of precaution and preventive action, of correction on a priority basis in the source of the damage to the environment and the polluter pays principle, and also the observance of Community rules in relation to the environment to be evaluated. These data will be sent to the European Commission with the submission of the request for a Community contribution. The Portuguese authorities will submit the 2nd phase of the list of sites proposed for Natura 2000 (with the necessary maps and information) in accordance with Article 4 of Directive 92/43/EC (Habitats) during the third quarter of 2000, and also the formal guarantee that they will not allow these sites to deteriorate following the implementation of the measures co-financed by the Structural Funds. At the time of submitting the programme complement relating to each Operational Programme, the Member State will have to supply the European Commission with information on the measures taken to prevent the deterioration of the Natura 2000 sites affected by the measure. Given its importance for the implementation of the Operational Programme measures and the absence of the punctual transposition of Directive 97/11/EC, the Portuguese authorities undertake to complete the process of transposition of this Directive by the 2nd quarter of 2000. Role of the environmental public authorities The environmental authorities are associated with the implementation of the Community Support Framework, contributing in particular to:

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- drawing up objectives and environmental and sustainability goals for all the main priorities

of development; - drawing up the strategy, programme and specific measures in the sphere of the environment; - drawing up environmental and sustainability indicators. The environmental public authorities will further participate in drawing up the rules and implementation procedures for the main priorities of development, including collaboration with the authorities responsible for each economic sector (agriculture, transport, industry, energy, tourism, etc.) in determining eligibility and project selection criteria. The environmental public authorities will be represented in the technical group for the evaluation of the CSF. During the implementation of the measures provided for in the CSF, these authorities will be involved at four levels: 1) they will be responsible for the application of the national and Community legislation and policy

in force in the sphere of the environment. They will also be required to express their opinion on the investment projects in the context of environmental impact evaluation;

2) they will sit on the CSF Monitoring Committee; 3) they participate actively in the thematic group on the environment to be set up under the CSF

Monitoring Committee. 4) they participate in the management units, and especially the following programmes:

- Priority 2: Agriculture, Fisheries, Economy (Industry, Energy, Tourism, Commerce and Services),

- Priority 3: Transport and Environment, - Priority 4: Regional Operational Programmes.

They furthermore sit on the Monitoring Committees for Priority 1 programmes: Education, Employment, Training and Social Development, Science, Technology and Innovation, Culture, Health and Information Society, when they are not part of the Management Unit. The environmental public authorities of the regions of Madeira and the Azores will be associated with the implementation of the respective Operational Programmes through the determination of eligibility and project selection criteria and also in evaluations carried out in the course of the period of validity of this CSF. They will also be called to give their opinion on investment projects in the context of environmental impact evaluation and also verification of compliance with the application of national and Community legislation and policy in force in the environmental sphere.

EQUAL OPOPRTUNITIES FOR MEN AND WOMEN The schemes and measures co-financed by the Structural Funds must be compatible with Community policy and legislation on equal opportunities between men and women. Operational Programmes will include, as far as possible, measures aiming to reduce unequal opportunities between men and women.

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The Member State will lay down the measures for integration and the human and financial resources likely to favour the application of the principle of equality between men and women under the CSF and the respective operational measures. COMMON AGRICULTURAL POLICY AND OTHER POLICIES The schemes and measures co-financed by the Structural Funds must be compatible with the common agriculturel policy and all its components, so that consistency with the measures applied under other CAP instruments is ensured, in particular measures applied in connection with common organisations of the market. They must furthermore be compatible with the common fisheries policy and other Community policies.

5 – SMALL SUBSIDIES FOR LOCAL ORGANISATIONS In accordance with Article 4(2) of Regulation 1262/1999 on the European Social Fund, the programming of the measures of the Fund will have to provide for a reasonable sum of the appropriations to be distributed in the form of small subsidies. Using the overall subsidy mechanism, in accordance with Article 27 of Regulation 1260/99, these subsidies will be accessible to non-governmental organisations and local partnerships, possibly with special rules of eligibility. These measures could be financed in accordance with the financial provisions laid down in Article 29(6) of Regulation (EC) No 1260/99.

6– EFFICIENCY RESERVE The efficiency reserve is 4% of the appropriations of the Structural Funds planned in the Community Support Framework, in accordance with Regulation (EC) No 1260/99 of 21 June 1999 and particularly Article 44 thereof. The allocation of this reserve constitutes an instrument for stimulating the efficiency of all Operational Programmes, which must be assessed in an objectively competitive situation. The analysis of the efficiency of each of the Operational Programmes will be carried out after the mid-term evaluation and no later than 31 December 2003. The evaluation of the efficiency of each Programme will be based on the examination of a limited number of monitoring indicators which reflect efficiency, management and financial implementation. These indicators will be laid down by the Member State in partnership with the European Commission and quantified (objectives to be achieved in 2003) by the Member State; the financial and management indicators common to all measures are entered in the Operational Programmes, with the specific indicators of the effectiveness of each Operational Programme being included in the programme complements. Monitoring of the quantification of these indicators will be carried out in the yearly reports on implementation as well as in the mid-term evaluation. Halfway through the period, and no later than 31 March 2004, the European Commission will, in close concert with the Member State on the basis of proposals submitted by the latter, allocate the efficiency reserve to the most efficient Operational Programmes.

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Following this allocation, the Operational Programmes will be adapted in conformity with a formal European Commission decision, in accordance with Articles 14 and 15 of Council Regulation (EC) No 1260/99 of 21 June 1999; the Community Support Framework will also be formally adapted as a result of this allocation of appropriations.

7 – PROGRAMMING RESERVE In addition to the efficiency reserve, the Community Support Framework provides for a programming reserve of 2.6% of the Community appropriations provided for in respect of the period 2000-2006. The allocation of this reserve constitutes a flexible instrument of the Community Support Framework and the Operational Programmes which is intended to increase the capacity for adaptation and response to the uncertainties arising from the length of the programming period, to the consequences of the process of the globalisation of the economy and society and to any occurrence of unexpected situations which justify the adaptation of the current measures or the establishment of new Operational Programmes. When the allocation of this reserve is taking place, any additional needs of the agricultural sector of the Azores will be examined. The European Commission, in close concert with the Member State and on a proposal from the latter, will allocate the programming reserve simultaneously and consistently with the allocation of the efficiency reserve. The Community Support Framework and the Operational Programmes will be adapted accordingly, in accordance with Articles 14 and 15 of Council Regulation (EC) No 1260/99 of 21 June 1999.

8 - INFORMATION AND PUBLICITY The information relating to the Community Support Framework 2000-2006 will be accessible to all those potentially interested, from public information to restricted information for use by government bodies or services, both sides of industry, final beneficiaries and Community institutions, with a view to - guaranteeing transparency, by informing the target public (both sides of industry, economic

agents and potential final beneficiaries) about the Structural Funds and corresponding application procedures;

- increasing the visibility of Community action, by making public opinion aware of the role of the

Structural Funds in support for regional development and economic and social cohesion in Portugal.

Recourse will be had to all available means to achieve this objective – from the written word, using the distribution of newsletters, leaflets, pamphlets, etc. to electronics, with the production of CDs and Web pages, videos, etc., especially in conjunction with the information system.

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The implementation of information and publicity measures, both in connection with the CSF and the various Operational Programmes, follows a “Communication Plan”, defining the objectives, strategy, target public, anticipated budgetary appropriation, body responsible for their implementation and evaluation criteria in respect of the measures carried out. The Member State will appoint a body responsible at national level for ensuring the monitoring and coordination of the information and publicity measures. Under the management of each programme, a person responsible for information and publicity will also be appointed.

9 – ELECTRONIC INFORMATION SYSTEM In accordance with Article 34 of Council Regulation 1260/99, the management authority is responsible for the establishment and operation of a mechanism for the collection and processing of reliable physical, financial and statistical data on the implementation of the Community Support Framework and the Operational Programmes, with a view to supporting management, monitoring and evaluation. This mechanism will also allow the monitoring indicators referred to in Article 36 to be quantified, will make information available for the evaluation provided for in Articles 42 and 43 and will further include the computer media for the transmission and interchange of data with the European Commission as provided for in Article 18(3)(e). This information system will be allocaed the necessary human resources for its stability and operation, these resources being subject to initial and periodic information measures for updating knowledge with a view to ensuring the efficiency of the system. The electronic information system of the Community Support Framework and the Operational Programmes will include data relating to the Structural Funds, having regard to its specific characteristics. The compatibility and transfer of data between the CSF information system and systems specific to each Fund will be ensured independently of its own characteristics. The system will allow the exchange of computerised data with the European Commission according to the model standardised for all Member States and drawn up by common agreement. The Member State must ensure that the information system will have to take into account the codification proposed by the Commission. This system, which ensures the exchange of computerised data with the European Commission, includes two levels of access: a) a level which makes access possible to information for management, monitoring, evaluation

and control; b) a level of information for dissemination.

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LEVEL OF INFORMATION FOR MANAGEMENT, MONITORING, EVALUATION AND CONTROL This level integrates and processes the information necessary for the process of decision-taking, monitoring, evaluation and control and provides in detail pre-defined information, making it possible in particular to: a) guarantee the updatedness and integration of all information about the Community Support

Framework, the Operational Programmes and all the Funds, and also the uniformity of the instruments at the disposal of the Management Units of the various Operational Programmes;

b) quantify the indicators regarded as relevant; c) create historical registers; d) make information available concerning the CSF and the Operational Programmes in electronic

form to all potentially interested parties; e) adopt predominantly the Internet as a vehicle of communication; f) supply updated information concerning support for management, monitoring and the evaluation

of the Community Support Framework and the Operational Programmes; g) integrate support modules for decision-making, geographical referencing (GIS) and the export

of information. The system will be fed at project level. LEVEL OF INFORMATION FOR DISSEMINATION The information relating to the Community Support Framework 2000-2006 will be accessible to all potentially interested parties at the earliest opportunity, with the objective of ensuring the widest universal availability for the target public, using, in particular, the Internet. The information to be made available will be specified and processed by use profiles in accordance with the different interests of the target public, with information being being given to interested parties without major demands being made in respect of technological requirements. The CSF management authority is, through its Chairman, responsible for the information system for the various Community funds, and in this capacity he is the interlocutor with the European Commission.