Measures include €600 million credit line targeted support for energy intensive businesses
Already weeks into the economic crisis prompted by the rising cost of energy, Portugal’s government has today finally unveiled its promised support for struggling businesses.
It centres on a €600 million credit line, targeted support for energy intensive industries, reinforced subsidies and tax reductions.
While critics have wasted no time in saying it is “much too little, too late”, economy minister António Costa Silva has stressed the government “cannot respond to all the problems” of the nation’s businesses.
“We cannot deal with everything that is going on in businesses”, which is why, he stressed, “it is very important” that companies take advantage of funds being made available for decarbonisation “because this will help reduce energy bills”, explains Expresso.
First to the various measures announced. Taking the package chronologically, the minister of the economy outlined the ‘reinforced support’ to gas intensive industries:
- current support of €400,000 per year to be increased to €500,000 (to finance 40% of the increases in gas costs. But within this measure is the understanding that “in determined situations” and with approval from the European Commission, certain companies could receive from between €2 million to €5 million in annual support.
- €290 million to be made available for ‘accelerating energy transition and efficiency, promoting the decarbonisation of industry, the production of renewable energies and optimisation of energetic consumption.
- €15 million to go towards subsidising the costs of transporting goods by rail. This will work out at giving businesses €2.11 per km travelled by each electric train, and €2.64 per km in the case of diesel-powered trains.
- €120 million to be channeled into helping IPSS (private institutions of social solidarity) pay their natural gas bills. IPSS will also be offered a line of finance to the end of 2023.4
- €600 million credit line for businesses from the second half of October. How this will work is in the form of ‘a guarantee of mutual support’ over an eight-year pay-back limit, with a 12-month initial period where no payments need to be made.
- €25 million to go towards support 20% of IRC (business tax) costs where they apply to electricity, natural gas and fertilizers; temporary suspension to be continued on ISP (fuel tax) and carbon tax with regard to natural gas, as well as with agricultural diesel.
All these measures add up, said António Costa Silva, to an outlay by the government of €1.4 billion – a relatively small fraction of the increased revenue rolling into State coffers every day due to inflation.
And as to ‘the windfall taxing of exorbitant profits’ made by fuel companies/ supermarket chains, in spite of Ursula Von der Leyen’s enthusiasm for them, this government has opted to ‘wait with serenity’ for a more formal greenlight.
The European Commission yesterday proposed various measures – including a 33% tax on the profits of fossil fuel companies, to be called a ‘solidarity contribution’.
Mendonça Mendes, however – Portugal’s secretary of state for fiscal affairs – has said that the government ‘wants to wait and see’ how these proposals are received.
“We will wait with serenity to see what is constructed at a European level”, he said today.
When the government presented its measures to support families almost two weeks ago, the consensus then was that it was offering ‘a handful of nothing’. Worse, a handful of nothing with some rather nasty surprises.
Since then, ministers have been at pains to try and rewrite negative headlines – not really succeeding.
This latest presentation is almost certain to go the same way.
Political parties will be giving their views in time for the evening news. But political analyst José Gomes Ferreira has already told SIC that business “have no reason to sigh with relief”.
The support package is a patchwork of “touches and revisions” (an expression that very possibly works better in Portuguese than English). There is nothing ‘decisive’ in it to give businesses any real relief, or to make their lives any easier, he said.
More in the way of reactions will be coming over the next few hours.