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Portugal increases loans to mitigate coronavirus

Portugal is increasing its credit lines for companies experiencing difficulties over the coronavirus pandemic to a total of 4.2 billion euros, the government said, after the European Commission approved a financial package to support government finances, Reuters reported.
So far, companies have applied for 90 million euros of the initially envisioned 3 billion euros of credits announced by the government two weeks ago. The loans are aimed at the tourism sector, hotels, restaurants and traditional industries such as textile and woodworking, BTA said.

After the European Commission announced on Saturday that it would offer Portugal a package worth 13 billion euros, the government announced it would increase its credit lines by another 1.2 billion euros today.

The additional funds are for companies in the trade and service sector, Economy Minister Pedru Siza Vieira said at a press conference last night.

Freight and passenger transport will also be added to the list of sectors, he added.

Until now, those infected by coronavirus in Portugal are 11,730 and the deceased are 311. The state of emergency, declared on 18 March, was extended to 17 April

Portugal's economy, which depends heavily on tourism and exports, is suffering a heavy blow from a sharp decrease in demand, with over 30,000 companies applying for government support to pay half a million employees because their activity has almost stopped.

The Portuguese Banking Association calls on the government and the EU to boost the economy to prevent a sharp rise in bad loans resulting from the coronavirus.

The country's banking sector still bears the scars of the debt crisis and the sharp jump in non-performing loans after the 2010-2013 recession, which led to the collapse of banks.

It is extremely important to adopt measures to mitigate the effects of the public health situation on the ability of companies and families to continue to ensure the fulfilment of their credit obligations, the President of the Portuguese Banking told Reuters Fernandu Faria de Oliviera Association.

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