Angry protestors in Porto yesterday, complaining about the rising cost of living for people whose salaries haven't increased for years...

Emergency support for Portuguese businesses ‘ready to go’

Tax credits and ‘direct help’ promised to sectors most affected by fuel crisis

Emergency support for Portuguese businesses struggling with the effects of the fuel crisis is ‘ready to go’.

Expresso’s headline actually says it is “advancing now” – but the ‘off’ will have to wait until the new government is sworn in on Wednesday afternoon.

The nuts and bolts of the plan are tax credits to carry businesses through the rest of the year, as well as direct support for sectors most affected by the rising cost of fuel (ceramics, metallurgical and glass, particularly).

The PM is said to have “refused to return to the simplified lay-off” scheme – introduced during the first ‘Covid lockdown’ – even though this has been the request of business federations.

The news comes against a ‘complicated backdrop’, in that outgoing environment and energetic transition minister João Pedro Matros Fernandes recently pledged €380 million to businesses most affected, and “almost at the same time” outgoing economy minister Pedro Siza Vieira described a credit line of €400 million.

Exactly how much and when businesses are to receive the government’s help will come clear over the course of the next week.

In many ways, headlines are ‘running away with themselves’: for example ‘the big news’ of Portugal and Spain being recognised as an ‘energetic island’, with specific advantages, has seen Spain admit that no results of this ‘political coup’ will be felt for weeks (three to four, at least). Ditto for the plan to see IVA reduced on fuel from 23% to 13%. Everything is moving at a ‘snail’s pace’ for those who need relief most.

According to Expresso, even though the government plans to increase help to businesses, this certainly isn’t the case for Portuguese families.

Other than the “new social support for those with most fragilities – already approved but with no details” – the prime minister is said to want to “wait to see how inflation evolves (it is currently at 4.2%). For example, “he does not intend to increase salaries of public sector workers more than the 0.9% already budgeted for”.

The government’s idea, says Expresso, is to “reinstate (people’s) lost purchasing power only next year. The prime minister has left this decision for the next State Budget, which he will have to introduce in October”.

This may sound ‘reasonable’, but of course it isn’t. Loosing purchasing power and being told it will be returned to you ‘next year’, in another budget, is cold comfort for anyone unable to make ends meet in March Next year is a long way away – as people protesting in Porto yesterday about the rising cost of living on low salaries are only too well aware.

Another very moot point about the government’s strategy is that it hasn’t managed to get a State Budget passed for this year yet – and it won’t until at least April, possibly May.

The reality is that even with an absolute majority no one can put their hand in the fire and say with any certainty that a State Budget for 2023 ‘introduced in October’ will be accepted.

President Marcelo has already commented on the make-up of the new executive, saying he would have made “different choices” – and various stories in the media have pointed to the absolute surprise of economy minister Pedro Siza Vieira in being ‘dropped’ by António Costa with apparently no advance notice.

Mr Siza Vieira believed almost right up to the moment where the list of new ministers was leaked to the press, that he would be continuing in his role – hence his busy agenda preparing further support for cash-strapped businesses, say reports.

natasha.donn@algarveresident.com