ABSTRACT: Institutional arrangements to provide water services have been reshaped extensively worldwide. This paper provides a theory-informed account of the way in which water service provision has been physically and institutionally restructured in the Algarve, Portugal over the years. Ever-expanding demands for water services by the tourism sector, along with European Union (EU) regulations and money, made the local people dependent on national policy for water service provision. Parts of the Portuguese national elite, favouring the construction of water resources as "strategic", "social" goods rather than "economic", "scarce" goods, worked towards installing national level control over water services. They became part of the state's decentralised hegemonic spatial strategy for expansion of tourism in the Algarve. The district level was constituted as a decentralised level of national resource governance. The case study shows the role of European policies in restructuring the spatio-temporal order in the Algarve and strengthening the influence of the national state within the region. The reconfiguration of the water sector in Portugal illustrates 'Spatial Keynesianism' with half-hearted mercantilisação of water services as an outcome of a juxtaposition of a nationally rooted state-led water service provision within more flexible approaches originating at the European level. A consequential outcome has been that water quality, sewage treatment and reliability of services, has significantly improved in line with European requirements.
KEYWORDS: European policies, rescaling, water management, national state, sanitation, Algarve, Portugal