Economy minister Pedro Siza Vieira

Portuguese government injects another €1.5 billion into economy to help micro, small and medium sized businesses

The Portuguese government is injecting another €1.5 billion into the economy to help support micro, small and medium sized businesses through the new State of Emergency, due to begin on Monday (November 9).

Speaking to the press last night following a new meeting of the Council of Ministers, economy minister Pedro Siza Vieira explained that half the money would be given in the form of grants, half as loans.

‘Target’ sectors are commerce, culture, lodging and touristic activities and restaurants.

Mr Vieira stressed that new restrictions coming into place in the run-up to Christmas – traditionally a ‘good’ time for most small to medium sized businesses – would undoubtedly see consumer demand ‘drop even further’.

Thus the new measures will definitely give struggling businesses some extra help – but they won’t “solve all the problems”, he conceded, adding: “We have to face this with sincerity”.

So what does the new ‘package’ presented under the programme boil down to?

Reports say measures include grants for micro-businesses of up to €7,500, while small businesses will be eligible for up to €40,000. “They can use the money however they like, including to pay salaries”, said the minister yesterday.

Most important perhaps is the news that the ‘support for a progressive return’ regime (an updated form ‘simplified layoff’) is to continue until ‘at least the first quarter of 2021’. This support has already been taken up by at least 13,000 companies.

Businesses eligible are all those that have registered a 25% fall in receipts during the first nine months of this year. These businesses however will all have to have their ‘fiscal and contributive situation in order’.

The credit aspect of the package is to be available for the export sector, and will give exporters the possibility of converting 20% of the credit into a non-repayable grant, as long as they maintain their current workforce (ie do not dismiss anyone).

There is also to be created a €50 million credit-line for businesses supporting the events sector.

Said Vieira, the new cash injection is ‘supported by European funds, with bank credit attributed by the financial system guaranteed by the State. Part of this credit can also be converted into non-refundable funds’.

The government estimates that around 100,00 companies could qualify for the new support, which he says will be launched “as quickly as possible” – hopefully by the beginning of December.

What is required first is for Brussels to give the programme the necessary green-light.

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