The Government approved yesterday in the Council of Ministers a draft law with measures to support the response capacity of local authorities to combat Covid-19, which provides for a moratorium on municipal contributions to the Municipal Support Fund (FAM).
According to the Minister of Modernization of the State and Public Administration, Alexandra Leitão, the draft law, to be submitted to the Assembly of the Republic for approval, contains exceptional measures, applicable until 30 June 2020, which aim to «ensure an immediate response and effective in the prevention, containment, mitigation and treatment of epidemiological infection” by the municipalities.
From the outset, according to the minister, a moratorium on capital repayments that municipalities have to make annually within the framework of the FAM was decided.
This is good news for the Algarve municipalities of Portimão and Vila Real de Santo António, which are among the 13 nationally that have used this fund, like Alandroal, Alfândega da Fé, Aveiro, Cartaxo, Fornos de Algodres, Fundão , Nazaré, Northeast, Paços de Ferreira, Vila Franca do Campo and Vila Nova de Poiares.
"Here in two dimensions: either the municipalities that are taxpayers, and which have a moratorium on their contributions, or also the municipalities that have loans from the FAM will not have to remunerate the capital in the year 2020, being diluted by the remainder of the years of the loan. This is to facilitate liquidity, which is very important for municipalities to have», explained the minister.
Among the measures, Alexandra Leitão highlighted that it was also determined that expenses with goods and services related to the fight against the pandemic will be eligible for the effects of the Municipal Social Fund.
The FAM, created in 2014, is a mechanism for financial recovery of municipalities in a situation of financial imbalance, through municipal adjustment programs.
It is constituted in equal parts by the State and by all Portuguese municipalities, through a share capital of 650 million euros.
The mechanism foresees that municipalities in difficulties can use the fund and simultaneously adopt measures for budget rebalancing and debt restructuring, accompanied by financial assistance.
To help local authorities fight the pandemic, an exceptional regime, valid until June 30, was also approved at the beginning of April, which will allow expenses directly related to the fight against Covid-19 not to count towards the debt limits. for all municipalities, including municipalities that are in the FAM.
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