Transfer of €850M for Novo Banco injection ‘not without informing PM’

  • Lusa
  • 13 May 2020

Mário Centeno said that no transfers or loans were made without the knowledge of the prime minister, António Costa.

Portugal’s minister of finance, Mário Centeno, said on Wednesday that the transfer of 850 million euros in state funds to the banking sector Resolution Fund to be injected as fresh capital into Novo Banco, the successor institution to Banco Espírito Santo, which collapsed in 2014, was not done without informing the prime minister.

“No, it was not without his knowledge,” Centeno told a hearing of parliament’s budget and finance committee. “There is no government decision that is into subject to a joint decision of the Council of Ministers.”

Centeno, who is also a minister of state, also said that no transfers or loans were made without the knowledge of the prime minister, António Costa, explaining that a file for the prime minister containing information on the matter “arrived a couple of hours late, and the prime minister, when he gave his reply, did not have the updated information in front of him”.

Expresso newspaper reported last week that the Resolution Fund had been given another state loan of 850 million euros to inject fresh capital into Novo Banco.

The news came after Costa had on the same day assured parliament, in the fortnightly debate and questions, that there would be no more state aid for Novo Banco until the results of an audit being carried out on the institution were known.

On Friday, the prime minister explained that he had not been informed by the Ministry of Finance of the 850 million  euros payment, and apologised to the opposition Left Bloc (BE) for having given wrong information during the debate.

Centeno on Tuesday said in an interview with TSF radio that there had might have been a failure in communication between his office and that of the prime minister regarding the capital injection, but “not a financial failure”, which would be disastrous.

“We can acknowledge – there may have been a delay – a failure in communication between the Ministry of Finance and the prime minister at the time of the fortnightly debate,” he said on air.

However, the minister added, there was no “financial failure,” which “would have a disastrous nature for the financial system and banking system in Portugal.”

In the midst of the current severe economic crisis caused by the Covid-19 pandemic, Centeno said, Portugal “cannot afford to put a bank at risk”.