Alfred Kammer, the head of the European department, warned: “We obviously must seriously consider ending the moratorium on executions.”
This is a warning that has been echoing in recent weeks. Recently, the European Investment Bank (EIB) requested a suspension of enforcement and cautioned. This Wednesday, the International Monetary Fund (IMF) also joined the topic of most concern. The director of the European Monetary Fund’s department warned: “We obviously must carefully consider ending the moratorium on executions.”
Alfred Kammer, the leader of the International Monetary Fund, which oversees Portugal and other European economies, emphasized that “for banks, it is very important to assess the true condition of the company” and that this change depends on the country. Where the pandemic arrived, where it is today, and where they are located. Trying to get out of the crisis. The most indebted (companies and banks), such as Portugal, and where there are more companies that are no longer feasible or even zombies, will have to properly evaluate what they intend to do.
He added: “In the future, countries must see the pandemic end for companies to survive.” Then, banks must carefully evaluate the business plans of these companies (customers) to realize the value of “necessary reserves for potential losses.”Chairman of the International Monetary Fund and colleagues of Vítor Gaspar European Outlook.
The Portuguese government has begun to gradually implement this phased withdrawal by sector. Economy Minister Pedro Siza Vieira said that he is “working hard” to see whether debt recovery barriers will not prevent areas such as recovery and other areas that are closely related to tourism on debt barriers. field. Most of the bank’s grace period is scheduled to end in September.
In early February, the minister admitted that the executive officer was discussing this issue with the Bank of Portugal (BdP) and the Portuguese Banking Association (APB). He said in the “Tourism Status” webinar: “Not only did we discuss the suspension of payments until September, but also the “extension of the remaining debt period.”
Also on this Wednesday, the OECD also touched on this hot spot. Many companies in Portugal may simply not work. Zombies, credit facilities, and bureaucratic bankruptcy procedures may make companies artificially bankrupt.
In its annual study on structural reforms, the OECD said that in the specific situation of Portugal, another major issue that remains to be resolved is debt and the extension of the life of companies that are not feasible but cannot fail.
For the organization’s expert team, “there is room for improvement in bankruptcy procedures, that is, by reducing the time for repatriating or releasing debts and forgiving more debtors’ assets in the bankruptcy proceedings of heavily indebted entities.”
EIB also called for caution with regard to default situations
In an interview with Dinheiro Vivo last Saturday, Ricardo Mourinho Félix, vice president of the European Investment Bank, also believed that if an agreement is reached with Europe, “a little more extension of the suspension period will be useful. “. In any case, the former Chancellor of the Exchequer did not think that “bad guys exploded,” because companies and banks are doing much better in this crisis than in the previous one.
According to data from the International Monetary Fund, Portugal is the third largest country among 28 economies, and its default loan burden is the highest among the total bank credits.
This photo was taken in the fourth quarter of 2020, so it was taken before the third wave before the first pandemic and severe confinement. At the time, the country was expected to grow by 6.5% in 2021, and the International Monetary Fund (IMF) is now reducing that number to 3.9%.
In the April 2021 World Financial Stability Report, the International Monetary Fund stated that countries like Portugal are in a “critical” position due to the adoption of this suspension of loan repayment mechanisms.