Centeno renews the mandate of his chief of staff before leaving the Bank of Portugal

Mário Centeno and Álvaro Novo have been friends for years. One was a minister, the other was chief of staff at the Ministry of Finance, and later Secretary of State for the Treasury, respectively. When Centeno was chosen by then-Prime Minister António Costa as governor of the Bank of Portugal, he brought his economist friend along as his chief of staff. Now, in the week his five-year term ends, he has internally announced the renewal of Álvaro Novo’s role as director in an office that directly supports the acting governor.

Mário Centeno’s replacement as governor of the Bank of Portugal is more than predictable, even considering his willingness to continue, as he has publicly stated, and Prime Minister Luís Montenegro’s words at Herdade do Chão da Lagoa, stating that Centeno “meets all the conditions” to continue. In open conflict with Joaquim Miranda Sarmento — he has made several public statements critical of the current Finance Minister’s budget management, and he even began signing an annual economic analysis, parallel to that of the central bank itself — Centeno has a clear course of action. The early elections created some suspense about what might happen, but the AD (a coalition between the PSD and CDS-PP) strengthened its vote, and the change became inevitable.

His five-year term ended last Saturday, and the prime minister has already confirmed that he will announce the name of the governor for the next five years next Thursday. But this successor — Álvaro Santos Pereira is one of the strongest candidates, following the rejections of Ricardo Reis, Sérgio Rebelo and Vítor Gaspar — has at least one legacy that Centeno will leave him. The current governor communicated internally, via an intranet network, the various deliberations of last week’s board of directors. In the subtitle “Consultants and Management Positions,” Centeno states simply, without further explanation: “Renewal of Álvaro Novo’s term as director of the GAB”. It’s not specified in this communication, but the term was renewed for five years.

When questioned by ECO, an official source at the Bank of Portugal limited herself to a single answer: “The rules existing at the Bank of Portugal regarding the internal management of its resources were followed”, which seems to indicate that the same may have been followed by previous governors, but without clarifying any of ECO’s detailed questions.

The internal communication was made shortly after the board meeting. What is the Governor’s Office (GAB)? “The GAB provides technical support to the governor. It is the Bank of Portugal’s liaison for institutional relations with the Government and other institutions”, reads the Bank of Portugal’s official website. In practice, it is the governor’s personal advisory office — indeed, that’s how it appears in the organizational chart –, that is, the chief of staff, representing the governor in relations with external entities and, therefore, a necessarily trustworthy figure. In this role, Álvaro Novo will earn approximately 12,000 euros per month, gross, plus his pension fund and vehicle.

And who is Álvaro Novo? A technical consultant at the Bank of Portugal since 2001, he graduated in Economics from the Faculty of Economics of the University of Coimbra in 1995. He subsequently studied in the US: he holds a master’s degree in Economics (Southern Illinois University) and in Applied Statistics (University of Illinois, Urbana-Champaign), and a PhD in Economics (University of Illinois, Urbana-Champaign). In 2013, he co-authored with Centeno the essay “Work, a Market Vision”, published by the Francisco Manuel dos Santos Foundation.

The renewal of Álvaro Novo’s position was not the only human resources decision made by the Bank of Portugal’s board of directors in the final week of Mário Centeno’s term. The governor of the central bank “fired” the deputy director of the Statistics Department (DDE), Luís Teles Dias, and promoted Rita Poiares to the same position, but with effect only from October 1st — more than two months in advance.

The DDE’s “essential mission is to prepare and disseminate Monetary and Financial Statistics, Balance of Payments Statistics, National Financial Accounts, and manage the Central Balance Sheets and Credit Liabilities”, reads the central bank’s official website.

Rita Poiares is the wife of Ricardo Mourinho Félix, who served as Secretary of State when Mário Centeno was Minister of Finance and who, after returning from the EIB, was also promoted to director of a custom-created department for international relations and cooperation, as stated on the economist’s LinkedIn page. Interestingly, this department appears between the board of directors and the General Secretariat, next to the Data Protection Officer/Office, and not listed among all the bank’s other departments.

An economist, Rita Poiares has been the coordinator of the national financial accounts unit in the Statistics Department of the Bank of Portugal since 2015. She holds a degree in economics from the Catholic University and completed the academic part of her master’s degree in monetary economics at ISEG.

Despite the official response, according to which the institution’s human resources management rules were followed and which indicated that similar cases had occurred in the past, the two appointments, for different reasons, caused discomfort at the Bank of Portugal. On the one hand, Álvaro Novo holds a position, that of director of the GAB, which is of personal and professional trust to the acting governor and, therefore, was chosen by him; on the other hand, Rita Poiares was appointed to a position that will only begin in October, which, according to two sources at the bank who requested anonymity, should have been chosen by the board with the new governor in office.

A third source at ECO pointed to another explanation for the renewal of Álvaro Novo’s term as director of the Governor’s Office. “Upon being reappointed for a second term, in accordance with the rules of the Pension Fund, he may be entitled to a pension on the components that are only paid to directors”, which will represent, on average, a 50% increase in monthly salary. In the first term with Director status, these components will not be taken into account in the pension.