COVID 19 | Portuguese Government presents economic stabilization plan
Last update: 12 p.m. on the 5th of June 2020
The Portuguese Government presented the Economic and Social Stabilization Program (PEES) to be implemented until the end of this year, focused in introducing measures to support employment, families, and public healthcare.
According to the Government’s forecasts, the Portuguese GDP will fall 6,9% in 2020 and unemployment rate will rise from 6.5% in 2019 to 9.6% in 2020. Prime Minister António Costa expects “the most abrupt economic crash since 1929, though it’s possible to mitigate the effects of a very deep economic and social crisis through support measures”.
Concerning the pandemic management and the gradual return to business, the restrictions in Lisbon and Tagus Valley will remain in place until the 15th of June, specifically in shopping centres and public service bureaus known as “Citizen’s Bureau” (where citizens can obtain citizenship cards, passports and similar documents and access public services).
Main measures of the economic and social stabilization program
Support for companies
- Extension of the moratorium on bank loans until March 31st, 2021, which allows for the temporary suspension of payments.
- Increased credit lines with State guarantee, up to a total of 13 billion euros (double the initial amount).
- Creation of a Development Bank that will potentially grant retail credit, directly to companies.
- Special program for SMEs to be launched soon.
The simplified lay-off regime will remain in place until the end of July, followed by three “alternative mechanisms” from that month onwards:
- Companies which remain closed as determined by the Government (as is the case for nightclubs and similar businesses) continue to benefit from this simplified regime.
- Companies with over 40% loss of sales can benefit from a support mechanism to resume normal activity, between August and the end of the year. Workload is reduced but contracts are not suspended.
- Creation of an extraordinary financial incentive that can be received in a single instalment or distributed over six months.
- Reduce inherent bureaucracy and other legal constraints, in addition to the exemption from the Court of Auditors’ prior authorization for contracts up to 750 000 euros.
Income protection for families
- Extraordinary support for workers who lost part of their income: one-off measure, payable in July. Minimum value of €100 and maximum of €351;
- Extra family allowance: single payment, in September, of the amount corresponding to the normal family allowance, for all children in the 1st, 2nd and 3rd tiers;
- Automatic extension of unemployment benefits until the end of 2020;
- Social aid support for independent contractors in sectors such as Culture.
National Healthcare Service
- More than 2 700 health professionals will be hired by December, to “increase the NHS’ capacity in its different dimensions”.
- Reinforcement of the intensive care response through public investment in order to reach the European average of 11.5 beds of intensive care per 100 000 inhabitants.
- Modernize the epidemiological surveillance system.
Restrictions on the return to business in Lisbon and Tagus Valley Region
Unlike the rest of the country and due to the high number of new cases in the region of Lisbon and Tagus Valley, Shopping centres will not be able to fully resume their activity (other than supermarkets, pharmacies and other first need activities) and public service bureau citizen stores will remain closed in this region until the 15th of June. The Government will speak to the health authorities next Monday and announce a final decision on Tuesday, 9th of June, following the Council of Ministers,
The COVID-19 pandemic in Portugal is apparently stabilized in all regions, except for Lisbon and Tagus Valley. Almost all new cases recently recorded have originated from this region, a cause for enough concern to adjust the Government’s recent plans.
The most recent data points to a total of 33.969 confirmed infections and 1.465 deaths caused by the new Coronavirus in Portugal so far.
Download the complete technical note here.