Covid-19 support could surpass 20 billion euros

Portugal’s finance minister on Friday estimated that total support to society against the Covid-19 pandemic could exceed €20 billion during a hearing in the Budget and Finance Committee (COF) in parliament.

“The budgetary effort is very significant, it requires a great deal of liquidity from the state, we are talking more about liquidity than the structure of budget execution”, Mário Centeno acknowledged, later mentioning that the total support may exceed €20 billion, including moratoriums for companies.

The minister listed the estimated values of the impact of the government measures, starting by mentioning that each month with one and a half million workers in ‘lay-off’ (temporary suspension of their employment contract) “may have a cost of approximately €1 billion.”

“The effort to implement additional expenditure in the SNS [National Health Service] points to values that will exceed €500 million during the year,” Mário Centeno said.

The minister added that the figures are “of the same order of magnitude both in the reinforcement of unemployment benefit and other social benefits, which will necessarily be reinforced.”

Mario Centeno also said that within the government’s simplified ‘lay-off’ mechanism there is “extraordinary support to companies in the first month of restarting activity, and this effort is currently equivalent to one minimum wage per worker and has a financial impact that is ‘one-off’ and is very significant.

“We’re talking about liquidity efforts, with the tax revenue gap, which can easily reach four or five billion euros, with the scheme that has been proposed to companies and to which they have been joining throughout the month of April, both in the Tax Authority and in Social Security,” he explained.

The minister concluded: “All in all, we are talking about values that can exceed, if we add the moratoriums of support to companies, €20 billion throughout the year 2020,” he said.