The council in Vila Real de Santo António has approved a motion for the government and council jointly to intervene in a potential business failure in the city.
Under the heading of ‘safeguarding jobs at the local printers, Litográfica do Sul, the CDU coalition members say that there are more than 40 jobs at risk if the situation is not resolved.
"Workers at Litográfica do Sul are facing great difficulties due to late payment of wages for the second consecutive month and the lack of clarification by their employer as to the reasons for this situation," read the council resolution.
According to the same document, the situation "is aggravated not by a shortage of orders, but by having no raw materials available to work with, which may be dragging the company to the brink of the abyss.”
The Vila Real de Santo António council understands that "it is very important that the company clarify to workers and to the general public the real cause of the difficulties that it is facing."
The CDU councillors who put forward the motion consider that "the council is obliged, within its remit of building the economy, to take action against the company management in order to avoid foreclosure."
Litográfica do Sul has a "fundamental importance" to the municipality of Vila Real de Santo António, and locally pioneered the graphic arts so it "makes perfect sense that the government, which has not hesitated to help out banks with millions of euros, now supports the company to continue its activity," said the CDU.
State or council intervention into small businesses does not fit the current government’s agenda and it would be surprising if the Minister for the Economy took any interest.
The Algarve is awash with the ruins of companies that have collapsed and died during the current recession with one in four technically bankrupt at the end of 2013 and over half failing to make a profit.
According to a survey conducted by a professor at the University of Algarve which looked at the Algarve business community in 2013, he found 7,150 companies registered in the region, with 27.6% of them technically bankrupt.
Most Algarve companies are in catering (1,296) and retail (1,160), which shows an "excessive dependence" on the tourism sector, according to Professor Luís Serra Coelho.
"It is important, in the Algarve, to look at the issue of competitiveness, so economic policy should be designed to diversify the product and resolve the vast asymmetry between municipalities in the Algarve," said Coelho.
