LISBON, February 9 (Reuters). Portugal’s largest publicly traded bank, Millennium bcp, wants the government to extend the loan repayment freeze for pandemic tourism businesses beyond September if the health crisis is not over, said CEO Miguel Maya.

He said Tuesday in a webinar on saving Portugal’s vital tourism industry that “repaying loans at a time when businesses are running out of income – due to a market failure due to the pandemic – makes no sense”.

“Millennium bcp will continue to defend the extension of the (loan repayment) moratoria on the tourism sector as long as the pandemic situation is controlled not only for businesses but also for workers,” he said.

According to the latest data from the Bank of Portugal, Portuguese banks have suspended principal and interest repayments on corporate and household debt totaling € 46 billion in an attempt to avoid a surge in non-performing loans.

The freeze on around a quarter of the affected loans will be lifted in March – mostly consumer loans, mortgages, and some business loans – but the rest will continue through September.

Tourism was crucial in Portugal’s recovery from the 2010 economic and debt crisis, reaching around 15% of Portugal’s gross domestic product in 2019.

Since the first quarter of 2020, bans and travel restrictions in Portugal and elsewhere have virtually paralyzed the entire sector.

“There is a need to maintain the capacity of the sector to ensure that the recovery can move faster after the health crisis is resolved,” Maya said. (Reporting by Sergio Goncalves, editing by Andrei Khalip and Alison Williams)

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