Government creates €3Bn credit line for struggling companies

Portugal’s Minister of Finance, Mário Centeno and Economy, Pedro Siza Vieira have stumped up €3Bn to help struggling small and micro companies survive the Coronavirus crisis which has brought the Portuguese economy to a standstill.

The emergency credit line was announced on Wednesday morning (today), within a raft of measures to stimulate the Portuguese economy, at a press conference in which the ministers announced a total financial stimulus package of €9Bn to help the economy survive.
After comparing the time in which we are living as “wartime” Mário Centeno echoed the former President of the European Central Bank (ECB), Mario Draghi: “We will do whatever it takes to deal with this pandemic.”
The Government announced a raft of measures, including an immediate financial stimulus package for companies and independent freelance workers worth €9.2Bn: €5Bn in tax relief, €3Bn in credit lines and €1.2Bn in contributions.
All told, these measures “represent a liquidity boost to the Portuguese economy of 17% of quarterly GDP.”
The ministers said that: “the time had come to keep our economy working and protect jobs”.
The money will be earmarked for those companies most effected, including €600 million for the restaurant and catering sector, of which €260 million has been set aside for small and micro-sized companies.
The tourism and travel industry sectors, entertainments area and events organisations will get a €200 million cash injection of which €75 million will be for small and micro sized companies.
Tourism developments such as resorts and guest houses will receive a credit line of up to €900 million of which €300 million will be for small and micro-sized companies.
Minister Siza Vieira said the credit lines would be made available “over the next few days” through the banking system and will have a validity until the end of the year and can be paid back over four years.
Over the next few days, the Government will announce a looser leash on company obligations and commitments to the Public Administration and each company will be evaluated on a case-by-case basis.
Mário Centeno announced too that the Bank of Portugal was studying the possibility of setting up a moratoria in terms of paying loans and interest on loans by, for example, paying in instalments or extending repayment periods or even freezing or reducing interest on loans.
“All the necessary legislation for this moratoria will be approved by the end of March” said the Minister of Finance.