Programme presented to combat “absolutely brutal social and economic costs of Covid-19”

PM António Costa has presented the government’s programme for economic and social stabilization as the country’s jobless figures, due to the pandemic, have risen by more than 100,000.

The economic and social tsunami caused by Covid-19 has prompted a series of measures which will remain in place until such time that the long-awaited funding ‘bazooka’ from Brussels finally arrives.

Against the backdrop of 800,000 jobs still in ‘lay-off’, this is the government’s way forwards:

Salary Protections:
“The loss of earnings is not the way to get over this crisis”, says PM Costa. Thus in July the executive is planning a ‘stabilisation complement’ designed as a one-off to ‘compensate wage losses equivalent to a month in lay-off’. This is a measure aimed at the lowest paid.

Families receiving child support (on 1st, 2nd and 3rd scales) will receive an ‘extraordinary’ extra one-month’s payment in September.

People who have lost their jobs will automatically receive unemployment pay to the end of 2020.

Protection and Creation of Employment:
There are to be a number of initiatives developed aimed at powering employment opportunities, particularly for the young and the handicapped. Alongside this various IPSS programmes will be created to ‘reinforce personalised support in creches, care homes and people’s own residences. These programmes should on their own create up to 3,000 new jobs.

With so many people suddenly unemployed, the government plans to roll-out training courses ‘to respond to the digital and energetic transition’. Up to 10,000 young people and adults will be able to sign up for short-term courses, while post-graduate courses are to be set up in a bid to attract a further 10,000.

Initiatives to attract manual labour
In this category the government will be setting aside 523 million euros for projects throughout the country, including the construction of fire breaks in forests, the removal of asbestos from schools and public buildings, and the construction of ‘several creches’.

Continuing support for lay-off regime
The current simplified lay-off regime – which has saved the loss of ‘hundreds of thousands of jobs’ – will remain in place until the end of July.

Businesses that are still unable to open – bars and discotheques particularly – can continue to make use of it. But as the prime minister explained, it is not ‘perfect’ as it penalises the worker (by paying them less than the usual salary) and depletes funding to the Social Security system.

Thus businesses that have decided to ‘return to activity’ will be rewarded with a ‘prize’ of two salaries per staff member, as long as they can guarantee that job for the next eight months.

There is also a scheme – for companies that have had to reduce hours by more than 40% – to ensure workers are kept on at up to 50% of their former salary.

Support for businesses
Assuring business liquidity is a priority at this point, said Costa, outlining measures for ‘reinforcing capitalisation’. A capitalisation fund is to be created to support companies with money that remains in the business “for as long as necessary, and which will be returned when the company is in a position to continue with its activity” without it.

Small and medium sized businesses (SMEs) will have a specific programme created that ‘favours their financing on the capital market”.

Other measures will also be brought in to ‘accelerate the growth of SMEs, while businesses that have lost part of their activity will be spared (either totally or partially) from IRC contributions.

As for ‘innovative projects’ (particularly when it comes to health), the State intends to support these with a fund involving €80 million.

A credit line of €50 million is also being made available for small retail outlets to start ‘reinventing’ themselves/ their activity.

Adds SIC detailing Costa’s speech, “lines of credit supporting businesses can be reinforced by up to €13 billion, depending on what is necessary. Regarding exporting companies, there is to be a €2 billion credit line, given current constraints”.

Finally, bank moratoriums on the payment of loans/ credits etc have been pushed forwards to March 2021.

Socially, there are various other plans in the melting pot – beyond the announcement that AL properties were to be given a ‘fast track’ to rebranding for long-term accessible rentals for the young (click here).

An emergency housing programme is to be created for homeless people.

The SNS health service is to be ‘reinforced’ – Between now and the end of the year, another 2,700 health professionals will be taken on, while Portugal’s intensive care ‘capacity’ which at the start of the pandemic was among the least prepared in Europe will be ‘beefed’ to reach European ‘averages’.

Health care of the elderly in care homes is also going to be brought into the public health service.
For schools, €400 million is being invested in support for distance-learning: this includes the purchase of computers, connectivity and software licences for all schools – privileging socially-deprived children – and developing a digital training programme for teachers.

Finally, for ‘culture’ €30 million is to be made available to help the country ‘pick up its cultural activity’ once again. Given the precarity of so many professionals working in the sector, in July and September, artists on green receipts will receive payments equivalent to three times the national minimum wage, minus social security discounts.

All these measures are to be discussed in parliament next week,and will serve as the basis for Portugal’s Supplementary Budget in this ‘most difficult’ of years.

Stressed Costa as he addressed the nation on Thursday evening, following the Council of Ministers that came up with these new plans, all signs point to a record fall in GDP and an exponential increase in unemployment this year.

President Marcelo has reacted to the PS plan saying it is incredibly difficult to come up with measures without knowing the extent of funding that will eventually be coming from the EU.