By Oliver Neuroth, ARD Studio Madrid

Portugal has seen a real boom in visitors in recent years. Lisbon and Porto are among the most popular travel cities in Europe, the Algarve region in the south has always been a tourist magnet. Around 27 million holidaymakers came to the country in 2019, a good seven percent more than in the previous year.

But now everything is different due to the corona virus, says Joao Fernandes, head of the Algarve Tourism Association. "It is obvious that we will not have a good year because of this situation," said Fernandes. "People don't feel like traveling and postponing their vacation."

In the capital, Lisbon, the cafes are empty.

The economy is dependent on tourism

Or they can't even travel: airlines cut connections, European countries close their borders. In Portugal, too, it has not been overland to Spain since the middle of the week.

Portugal seals itself off from the virus, but tourism is vital for the country. There is hardly any industry; the few larger factories include a VW and one of the French carmaker PSA. Both stand still because of the corona crisis. Small and medium-sized companies in various industries break off the orders.

A lone jogger does his laps on the beach in Porto.

Expensive aid package is supposed to alleviate the crisis

To support the economy, the Portuguese government has launched a € 9.2 billion aid program. The aim of the measure is to maintain corporate productivity and protect jobs, says Minister of Economy Pedro Siza Vieira.

Loans are planned for companies that have run into financial difficulties, especially in the tourism sector. The government also wants to defer or cut taxes and social security contributions. The government has not yet explained exactly where the nine billion euros come from.

If the sum is financed entirely from tax money, this would mean, purely mathematically, that each of the approximately nine million Portuguese pays 1000 euros to the companies in their country. That is an impressive sum, because many people only earn a minimum wage of 700 euros a month. However, EU funds or government grants that had already been planned elsewhere and are now being rededicated may also be used.

View of the closed city park of Porto.

"The state has to do everything"

President Rebelo de Sousa defends the aid package: "Life and health can only be saved if the economy doesn't die." The state must therefore help the economy to get through the next difficult months. "He has to do everything possible to protect the companies and therefore also the people, the families."

The state had to do everything. The President's words suggest that Portugal is on the list of countries that promise unlimited support for their economy. The household that had been painstakingly renovated in recent years would then become a problem again. Because, apart from the Corona rescue operation, the left-wing government has been willing to spend in recent months. Prime Minister Antonio Costa distributed tax gifts to his voters.

In addition, Portugal continues to have high debts, which amount to around 120 percent of its economic output. The former euro crisis country is back on shaky legs. And it is further vulnerable if tourism breaks down. Because Portugal hangs on him.