The European Commission EU has approved the Portuguese support scheme for companies affected by the Covid-19 pandemic in the Autonomous Region of Madeira, to the amount of 40 million euros after considering this level of support is “necessary, appropriate and proportionate.”
In a statement, the community executive stated that this support, approved in the light of the temporary framework for Flexible State aid adopted by Brussels to help deal with the economic impact of the pandemic, will be open to all companies active in the Autonomous Region of Madeira and will be provided in the form of direct grants and loans with state guarantees. The provision of support will be carried out by the Portuguese Mutual Guarantee Society and by the Public Institute for Business Development, acting on behalf of the State. The Commission stressed that “the scheme aims to provide liquidity for companies affected by the coronavirus outbreak, thus allowing them to continue their activities, undertake investment and maintain jobs.”
In their statement, the EU stated that “The Commission verified that the Portuguese measure is in conformity with the conditions established in the temporary framework” of state aid, namely by providing that “direct subsidies will not exceed 100 thousand euros per active company in the primary agricultural sector, 120 thousand euros per active company in the fisheries or aquaculture sectors, and 800 thousand euros per company active in all other sectors.”
The Community executive also indicated that the maturity of state guarantees for loans will be limited to a maximum of five years.
“The Commission concluded that the measure is necessary, appropriate and proportional to remedy a serious disturbance in the economy of a Member State while taking into account the importance of the Madeiran economy to Portugal.”
Measures have been introduced globally to combat the adverse effects of the pandemic. Entire sectors of the world economy have been paralysed by the pandemic and led the International Monetary Fund (IMF) to make unprecedented predictions in its nearly 75 years of operation concerning the world economy which they predict may fall 3% in 2020, due to a contraction of 5.9 % in the United States, 7.5% in the euro zone and 5.2% in Japan.
In Portugal, the Government expects the economy to decline 6.9% in 2020 and to grow 4.3% in 2021. While unemployment rates are expected to rise to 9.6% this year and drop to 8.7% in 2021.
Samantha Gannon
info at madeira-weekly.com
