First step towards implementing economic recovery efforts

The Social Partners’ Commitment to economic recovery “was the first step to achieve the common effort of economic recovery,” said Prime Minister António Costa at the signing ceremony in Lisbon.

“This is only a first step, because the crisis created by Covid-19 left deep wounds in our economic and social fabric”, deeply changing the situation of the month of February, when, he recalled, there was acceleration of the economy, historical levels of low unemployment, convergence with the European Union and consolidation of public finances.

António Costa insisted that “the key to resuming activity is called trust: trust regarding security in establishments, in travel, at work”.

“This is why this commitment” between the social partners and the government “that we will resume economic activity in accordance with the best standards defined by the DGS, based on the best scientific knowledge we have, in the best way to protect ourselves from the virus”, he said.

 

Joining forces to regain employment

The Prime Minister said that “recovery of employment is the next priority, and for that we need to join forces for a recovery as quickly and safely as possible”.

But “we cannot do it alone”, without the European Union, “because this recovery requires more capital in companies, more public investment, more effort in vocational training, more social support measures”.

Another reason why Portugal cannot recover on its own is that its economy “is now much more internationalised” – in February exports represented 44% of GDP, and tourism is substantially dependent on abroad.

António Costa said that “our main clients are Spain and Germany, and if their economy is bad, ours can’t be good. We need Europe to help all European economies to get back on track so that ours, and all of them, can get back on track”.

 

Balance between pandemic and economy

The Prime Minister said that “to revive the economy without letting the pandemic get out of hand is the balancing game that we have to maintain, so that we do not die to the disease or the cure, but that with the cure we save ourselves from the disease, saving income, employment and businesses, without which there is neither”.

“This global commitment has different declinations for each sector of activity,” he said, referring to the reopening of smaller establishments, commercial, hairdressers and barbers, opticians and automobiles, and “the agreement between the DGS and AHRESP, based on the DGS standards and a voluminous code of good practice that AHRESP has developed,” for the reopening of restaurants and the like, which was also signed today.

António Costa said that although it is not possible “to resume the activity without constraints that generate inconvenience”, “living with the virus implies living with many limitations, which are fundamental for the citizen to gain confidence to go to the hairdresser or barber, to the commercial establishment, to work”, so “that the economic chain can be re-established”.

“If we can’t re-establish confidence, then the problem is no longer just public health, but the subsistence of family income, because companies that don’t sell, don’t employ and, if there is no employment, there is no income,” he said.

So what the government did initially, as far as possible, was “to freeze the companies so as not to let them die, the employment so as to let it exist, and the income so as to avoid the biggest fall”, through measures to support their survival.

 

Support to business

The Prime Minister said that “these measures are having an effect on the economic fabric. Of the credit lines, we have already approved guarantees – which is the state’s share – worth more than EUR 5 billion”.

However, “State guarantees mean guarantees of taxpayers’ money, and loans are not money distributed, they are money contracted”.

“Banks are the vehicles for transmitting that money to the economy, and we want them to be demanding because it is about making viable companies that are in crisis because they have been hit by the virus, but that are viable; it is not about feeding companies that are not economically viable, so that taxpayers don’t have to pay for these loans afterwards,” he said.

By handing over the decision to the banks the government is also ensuring transparency, as it should not be “the government that decides which company it supports or not”, he said.

The Minister of State, Economy and Digital Transition, Pedro Siza Vieira, and the Minister of Labour, Solidarity and Social Security, Ana Mendes Godinho, were also participating in the ceremony.


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