At the same time that the government was meeting in the Council of Ministers to decide on new support measures for companies due to the pandemic of the new coronavirus, the Left Bloc announced in a press conference a package of “simple” and “quick” measures to guarantee to small companies, which are the bulk of the business fabric in Portugal, the payment of wages already in March and April. It is a direct injection of liquidity into the accounts of micro and small companies – provided they are not on a lay-off and as long as they have had at least a 50% drop in billing – intended strictly for the payment of wages.
In total, the Left Bloc estimates that the impact of this measure will be in the order of EUR 1650 million per month, at most, and this is the amount foreseen for the scenario in which all the small and micro companies in the country asked for support. That is, the amount may be less.
Speaking to journalists at a press video conference, Mariana Mortágua said that the measures so far planned by the Government to support companies are proving to be “insufficient”, mainly because they are “slow to apply”. "We need a quick and urgent proposal because the urgency of the moment demands an urgency in the response", said the congresswoman, defending that the moratoriums and the suspension of the payment of taxes are not enough because the big problem of the small companies at the moment is lack of liquidity, due to the lack of invoicing. Soon, it is up to the State to serve as an “oxygen balloon” to these same companies and thus prevent them, first, from closing, and second, getting into debt and creating future problems in the economy.
The support is intended for all micro and small companies that have had to close in the emergency period due to legal imposition or that have suffered billing losses of around 50%. Per micro enterprise we mean all companies that have less than 10 workers and a turnover of less than 2 million euros, and Small business we mean all those that have a number of employees below 50 and a turnover not exceeding 10 million euros. According to the blockade accounts, these companies make up 97% of the country's total business fabric, employing two and a half million people (there are around one million and two hundred thousand micro companies across the country and around 42 thousand small companies, in the accounts BE).
Therefore, this is the universe of companies that can remain under the BE proposal, provided that they have closed this period by legal obligation and prove the drastic break in billing, and provided that they have not accessed the regime of lay-off already provided by the government. In this case, BE wants to ensure that the company continues to operate with all of its employees (or rather, that it continues to pay its employees as if 'everything is fine'), while preventing even the most well-intentioned companies are heavily indebted to maintain financial liquidity.
The advantages, according to BE, are: speed, non-indebtedness, maintenance of employment, protection of the Portuguese business structure and, at the same time, the non-overload of Social Security coffers, thus avoiding the overload in subsidies. unemployment or otherwise. The proposal, however, has not yet reached the hands of the government, with Mariana Mortágua admitting that BE is presenting them for the first time at this press conference, but underlining that it should be the Government that implements this type of measures, and not the Parliament that approves them, given the urgency of situation.
The accounts are done and are millionaires. According to the blockade leader Mariana Mortágua, for each micro-company or sole proprietorship that is in these conditions, the State must ensure an oxygen balloon up to 5,900 euros, which means that, if we consider all micro-companies in the country, the maximum estimated cost is EUR 1150 million per month.
To this is added the injection of liquidity in so-called small companies, where the State must ensure liquidity of up to 31 thousand euros per month, and, if we consider all small companies in the country, the cost to the State will be 500 million euros.
In total, adding both, the cost to the State will be maximum of EUR 1650 million – if all companies ask for support. This is only for the payment of March salaries. That is, if the state of emergency remains in April, the amount doubles, and if it extends to the month of May, the value triples.
Asked whether BE admits to extending this support proposal over time, since it is not known how long the pandemic will last, Mariana Mortágua admitted that it would. “The payment of wages is already for March, but the measure would be extended as long as necessary. As long as the economy is suspended, companies must be able to be accompanied, and we must always consider that they can be extended as long as the tightening period lasts, ”he said.
The capital injection, however, must be strictly for the payment of wages and not to face other types of expenses, with the blocker admitting that this must be expressed in the law, being considered a crime if the contrary is proven. “There must be a letter of commitment signed by the company, which is verified a posteriori, and that if it is not fulfilled, it is a crime ”, says the blockade deputy, also adding that the Tax Authority has mechanisms to inspect the direct application of the money injected by the State.