The Council of Ministers today decided to extend the term of the moratorium on credit to families and companies ending on March 31, until another six months, until September 30, 2021.
“Exceptional measures to protect the credits of families, companies, private institutions of social solidarity, and other entities of the social economy, will come into force until September 30, 2021”, says the statement issued at the end of the Council of Ministers, which also decided to extend until October 14 the declaration of emergency situation throughout the country.
Bank moratoriums, which suspend payment of bank loan installments (principal and / or interest), had already been extended by the Government until March 31, 2021, which has now decided to extend it for another six months.
However, the extension of the moratoriums approved today provides different solutions for companies depending on the sector in which they operate and the impact of the pandemic on their activity.
Thus, companies inserted in sectors particularly affected by the pandemic, namely those of tourism, culture, social sector or car repair and trade, will benefit from the extension of the moratorium until September 30 in the exact manner defined until March 31, that is, they will continue to benefit from the suspension of payment of principal and interest.
As for the remaining companies that are currently covered by the moratoriums, the six-month extension (until September 30, 2021) approved today, maintains the suspension of the payment of capital, but not of interest, as stated by the Minister of State and Economy, Pedro Siza Vieira.
“All companies currently benefiting from the moratorium will benefit from this additional six-month extension until September 30, 2021,” said the minister, after recalling that the moratorium now in force (and ending on March 31, 2021) corresponds a suspension of the principal and interest payment obligations.
Pedro Siza Vieira clarified that “the extension that now occurs [until September 30, 2021] is for six months for capital installments, only”, so most companies will have to start paying interest on loans as of 01 April 2021.
However, and this was another of the decisions made today by the Council of Ministers, for companies in sectors particularly affected by the pandemic, that extension of the moratorium until September 30 applies to the suspension of payment of capital and interest.
These tourism companies, culture and other sectors most affected, will also have an additional period of 12 months to repay the outstanding capital.
In practice, this measure, as stated by Siza Vieira, means that if, at the time the moratorium entered into force, a company had a loan in which it still had two years to finish paying it, it will have, as of September 30 2021, another year to repay the loan.
The measure, he said, will make it possible to “reduce the effort” to repay loans, and accommodate the longer-term impact of the crisis.
In the case of families, the minister stated that “the same universe” as those that benefit from the moratorium on housing and education credits sees “also the obligation to pay interest and capital to remain suspended until September 30, 2021”.
According to data presented by Pedro Siza Vieira, at the moment there are about 35 billion euros covered by the moratoriums, and until March, the obligations for payment of capital and interest that are suspended represent around 10 billion euros. .
On the other hand, the extension of the moratoriums decided today represents around 7 billion euros more, which is the amount that companies and families will not have to pay until that date.
The amounts in question led the minister to point out the “very significant effort” that the banking sector is making and to recognize its contribution in mitigating the impacts of this crisis.
Pedro Siza Vieira also said that these measures were taken taking into account the uncertainty about the strength of the economy’s recovery and reiterated that the Government will assess the needs to maintain or create measures depending on the assessment being made.
Since April, thousands of customers have not been paying loans to banks, making use of the Government decree-law that allows for loan default, created as an aid to families and companies penalized by the economic crisis triggered by the covid-19 pandemic.