Government injects 970 million euros into TAP this year

By TPN/Lusa, in News, Business · 17-04-2021 16:00:00 · 4 Comments

The government plans to inject 970 million Euros in TAP this year, a measure classified as temporary and whose effect on public accounts is reversed in 2022 and 2023, according to the Stability Programme (PE)

The figure is included in a table of invariant measures in the document approved on 15 April in the Council of Ministers and that entered the 'site' of the parliament shortly after midnight.

After the injection of 970 million Euros "to be adopted" in 2021, the government expects the effect of 170 million Euros of that operation to be reversed in 2022, estimating the same for the remaining 800 million Euros in 2023.

On 12 March, the government submitted a notification to the European Commission for interim aid to TAP of up to 463 million Euros that "will allow the airline to ensure liquidity until the restructuring plan is approved," was announced.

In a statement, the ministries of Finance and Infrastructure and Housing, said at the time that, "despite TAP being under assistance under the rescue and restructuring aid," as part of the negotiation of the plan between Portugal and the European Commission, "it was accepted that aid of up to 463 million Euros could be notified.

"If approved, this amount will reduce the cash needs for 2021 that were included in the restructuring plan," the note added.

The notification of this aid makes it possible to respond more immediately to TAP's cash needs, the two ministries said.

As a consequence, the amount of the company's cash needs contained in the Restructuring Plan should be adjusted.

"This situation stems from the particular severity of the impact of Covid-19 on the aviation sector and its recent evolution," the government justified.

In 2020, TAP returned to state control, which now holds 72.5 percent of its capital, after the company was severely affected by the Covid-19 pandemic and the European Commission authorised state aid of up to €1.2 billion to the Portuguese flag carrier.

Six days after the executive's statement, the European Commission confirmed it had received a request from Portugal to provide interim state aid to TAP, which the government announced would be up to €463 million, with Brussels examining it as a "matter of priority".

"Separately [to the €1.2bn state aid already approved in June 2020], the Portuguese authorities have notified a support measure for TAP in the context of the coronavirus outbreak," confirmed an official source from the EU executive in a response sent to Lusa.



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Comments:

What an absolute joke. In a country with one of the lowest minimum wage and highest taxes in Europe, your money is spent to prop up another Frankenstein airline on life support. Just like Alitalia, what is the point in trying to run a viable business when you'll be in debt for all eternity? When many of your people are living below the poverty line, and ICU running out of oxygen during covid, this is a disgrace. Shame on the government and the EU.

By Tom from Açores on 04-05-2021 10:21

So will everyone at TAP get a raise?

Businesses are businesses. Some go out of business.

Politicians made this happen. They have all of your money to spend!!!!!! They are to blame.

By rod from USA on 22-04-2021 02:10

Very sad! I haven't seen government injecting any euro into the long asked for renovation of our healthcare system. Better payments for nurses, more hospital beds, more IC beds and you can think of some more....

By Ana from Algarve on 19-04-2021 10:45

What a waste of money!!!

By Joe from Other on 17-04-2021 06:31
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