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Finance Minister ‘deceived the Portuguese’ and lied over Novo Banco rescue

euromillions2In his weekly SIC TV programme, Luís Marques Mendes analysed the accounts of Novo Banco and concluded that the €1.149 billion requested of the Resolution Fund is a “calamity” for the Portuguese public.

Mendes added that, although the bank’s request for yet more capital is within the rules, “it’s all profoundly immoral.”

The former leader of the PSD was referring to the latest Novo Banco cash demand, after it posted a record loss of €1.413 billion for 2018. Marques Mendes considers that the Portuguese have every reason to be worried about the situation whcih he does not imagine will get better anytime soon.

In his commentary on SIC, Marques Mendes said the conditions of the sale of the bank to the US vulture fund, Lone Star, meant that the buyer could draw on up to €3.9 billion from the Resolution Fund to offset problem loans which were inherited from BES, run into the ground by Ricardo Salgado.

When Novo Banco was set up by the Bank of Portugal, as part of what it laughingly referred to as a rescue package, the new entity was said to only the good assets of the failed BES, since which time the new US owners have been demanding that taxpayers and the other high street banks, to fund what now is a private business.

“It’s a monumental hole. But the problem was created two years ago when the purchase and sale agreement was signed, which the Bank of Portugal negotiated and Mário Centeno approved,” said Mendes, referring to the €3.9 billion cushion available to the bank’s US owners who paid precisely €0 for 75% of the company’s shares.

Luís Marques Mendes also pointed the finger at the Finance Minister, accusing himself of lying, when he “created the expectation that that this financial cushion would probably not be used.” Mario Centeno made a “monumental mistake” and “deceived the Portuguese. Mario Centeno did not tell people the truth two years ago. He did not speak the truth,” said the widely respected TV commentator.

“Obviously if there is a cushion, that’s what the buyer will do – if there is money at hand, if there is easy money – he will go to the piggy bank instead of trying to pull in all those complicated loans.” That is why “the Portuguese have every reason to be indignant. This is the huge immorality.”

Last Friday, Mário Centeno ordered an audit of Novo Banco’s capitalisation process, a move that Marques Mendes considers to be purely political to divert attention from the bank’s behaviour.

“If Centeno had doubts about the loans, he should have ordered the audit at the beginning, before the sale,” said the commentator.

The President of the Republic, Marcelo Rebelo de Sousa, said that he agreed with the request for an audit and said that the Portuguese have the right to know what has happened to their money as many years have gone by with successive negotiations and no concrete knowledge of the destination of taxpayers’ funds.