State guarantee period for support line for major cultural events extended

The order concerns the State's guarantees regarding the various lines of support to the economy, including that of the Sports Federations

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The Government has extended the period of State guarantees, within the scope of the support line for major cultural events, according to an order published this Monday, February 14, in the Diário da República.

In June of last year, the granting of a State guarantee to the Mutual Counter-Guarantee Fund was authorized for the support line for major cultural events, endowed with 4,275 million euros.

The order published today, signed by the Minister of State, Economy and Digital Transition Pedro Siza Vieira, extends the deadline for contracting operations covered by this line, following a decision by the European Commission, of December last year, in Temporary framework on State aid measures to support the economy in the current context of the Covid-19 outbreak.

The order concerns the State guarantees regarding the various lines of support to the economy, including that of Sports Federations, in the amount of 3,8 million.

According to the diploma, the fact that the pandemic affects the real economy is taken into account, not only during the outbreak, but also in the subsequent period.

It is also considered that the maximum amount of the support lines is not fully used, which justifies this extension.

In addition to extending the maximum period for contracting measures to support covid-19 until June 30 of this year, the order also postpones the end of State guarantees until June 30, 2028.

The granting of the State's personal guarantee to the Mutual Counter-Guarantee Fund has a global amount of 4.275.000 euros, and is intended "to ensure the capital responsibilities of this Fund for the counter-guarantees provided to mutual guarantee societies, within the scope of the Support Line to the Covid-19 Economy – Major Cultural Events».

The text of the order specifies that it concerns the maximum global amount of funding of 30.000.000 euros, “in support of national companies arising from the Covid-19 disease pandemic”.

In the same document, the guarantee rate is fixed at 0,2% per year.

The concession comes within the scope of the Temporary Framework regarding state aid measures in support of the economy in the current context of the covid-19 pandemic, and is part of the legal measures and special regime of personal guarantees of the State to protect family credits, companies, private social solidarity institutions and other social economy entities.

The order recalls that Banco Português de Fomento proposed the launch of the “Covid-19 Economy Support Line – Major Cultural Events”, with a global amount of 30.000.000 euros, intended to support the treasury of micro, small and medium-sized companies. , 'which embodies the conditions notified to the European Commission and the subject of said decisions'.

This support line “involves the granting of guarantees by mutual guarantee societies and counter-guarantees by the Mutual Counter-Guarantee Fund and by the State, successively, to ensure coverage of liabilities, solvency and the regular functioning of the National Mutual Guarantee System”.

This credit line is intended to support companies active in the promotion of major cultural events, so that they can meet, in particular, the obligation to reimburse amounts received as admission tickets to festivals and shows of a similar nature, which were not carried out or were canceled due to the outbreak of the pandemic.

It is also intended to meet «liquidity needs, especially with a view to holding major cultural events in the 18 months following the contracting of the operation», he adds.

«The granting of a personal guarantee by the State on the basis of the measure to create credit lines aims to remedy the shortage of liquidity faced by companies in the cultural events sector, seeking to ensure that the disturbances caused by the Covid-19 outbreak do not compromise the viability", the order states.

The measure can only benefit companies that generally meet the following five criteria: do not have unresolved incidents with the Bank and the Mutual Guarantee System, at the date of issuance of the contract; have their situation regularized with the Tax and Social Security Administration; that were not considered as companies in difficulty on December 31, 2019, according to European regulations, resulting from the current difficulties of worsening economic conditions, in the context of the covid-19 epidemic.

Nor can they be entities with headquarters or effective management, nor be dominated by entities with headquarters or effective management in countries, territories or regions with a clearly more favorable tax regime; and must be included in the Central Register of the Beneficial Owner.