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Portugal announces aid of 125 euros and limits fare and rent hikes

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Portugal announced, on the night of this Monday (5), an extraordinary package of measures to help the population on account of record inflation in the country.

Among the main actions are the freezing of public transport prices, limiting the rent adjustment to 2% and the payment of a single installment, in October, of 125 euros (R$ 639.7) for all non-pensioners who receive until 2,700 euros (about R$ 13,800) gross per month.

Pensioners will receive, in turn, a single supplementary fee, equivalent to 50% of the pension amount. The government has also announced a readjustment of the amounts paid in 2023, depending on the income bracket.

Families will receive a bonus of 50 euros (about R$255) for each dependent child or young person up to 24 years old.

The government also announced that it will submit a bill to Parliament to reduce the VAT (value added tax) on electricity from 13% to 6%. As the Socialist Party has an absolute majority in the house, approval is already certain.

The government will also prolong the reduction of fuel taxes and fees.

The launch of the package of measures was made in a statement on national television by the Prime Minister, António Costa, who classified the measures as “very strong support for families”.

The estimated cost of implementing the actions is 2.4 billion euros (about R$ 12.28 billion).

“As a result of the pandemic and the war in Russia, we have been suffering a brutal increase in inflation that hits hard the purchasing power of families”, justified the socialist, who stressed that the measures will have an impact on “a wide domain of the middle class”. “.

“[O valor de] 2,700 euros is double the average monthly income in Portugal. Which means that it is a measure that is not exclusively aimed at the most vulnerable classes, like the 120 euros that we have already allocated”, he detailed.

From left to right, the other political parties complained about the delay in announcing the measures, noting that several European countries, such as France, Germany and neighboring Spain, had already detailed their extraordinary actions against inflation.

Vice-president of the PSD, the largest opposition party, António Leitão Amaro said that the measures “come late”. “The government acted late, thought about tax collection, didn’t put the family first.”

“Afternoon is better than never, little is better than nothing”, mocked deputy Rui Tavares, from the center-left Free party. The parliamentarian compared the Portuguese measures to those of other countries in Europe on the issue of mobility.

“In Germany, they had a national pass for only 9 euros a month and, in Spain, there is public transport that will be free, in certain cities, from next month”, he said.

The socialist prime minister countered the criticism, saying that it took time to calibrate support, to “combine short-term measures without fueling the inflationary spiral”.

On Tuesday (6), a group of ministers will detail points related to the budget and the implementation of the package. In the case of the limitation of adjustment of the value of rents, the government has already announced that the owners will have reductions in the income tax.

In a statement this Monday, António Costa also said that the support will not affect the objectives of reducing the Portuguese deficit and debt.

According to INE (National Statistics Institute), Portugal ended August with an inflation rate of 9%.

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