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Mario Centeno quits role as Portuguese government Finance Minister, leaving Eurogroup post

56mario centenoPortuguese Finance Minister Mário Centeno, the Eurogroup’s president, has resigned from government, following a period of less than idyllic relations with Prime Minister António Costa, and will be replaced by state secretary for budget João Leão.

The announcement was made on Tuesday (June 9) and Leão will take office next Monday (15 June), making his debut in the Portuguese parliament on the 19 June. Centeno, who had asked to step down both from the government and the Eurogroup, did not give reasons for his decision.

He will still chair the next meeting of the eurozone finance ministers on 11 June, where candidates to succeed him will be presented. His tenure will formally end on 13 July and his successor will be elected on 9 July.

Some candidates to chair the Eurogroup are already coming forward, like Nadia Calviño, the Spanish vice-president for economy, and Pierre Gramegna, Luxembourg’s finance minister.

Relations between Costa and Centeno have not been at their best in recent times. Since March there has been talk about a government reshuffle, but it has been delayed by the coronavirus pandemic.

In the end, it was Centeno himself who asked to leave. Centeno’s willingness to leave the government probably increased after a dispute in May over the transfer of €850 million to the Novo Banco, after Costa vowed before the Portuguese parliament that he would not inject any more money into that bank without knowing the result of the audit that is taking place at this moment.

Still, the prime minister renewed his confidence in the now-former finance minister in a meeting on 13 May. It is speculated that Centeno may move on to preside over the Bank of Portugal instead.

Centeno is credited with bringing Portugal’s public debt down by 14 percentage points to 117.7% in four years and reversing the country’s deep deficit to a 0.2% budget surplus in the last quarter of 2019.

Centeno’s replacement did not come as much of a surprise, as he has been instrumental in devising Portugal’s prudent macroeconomic strategy and is also said to be politically close to the prime minister.

João Leão was also the state secretary for budget between 2015 and 2019, in Costa’s first mandate. In the past, he was also the director of the Office of Studies of the Ministry of Economy between 2010 and 2014 and an adviser to the Deputy Secretary of State for Industry and Development between 2009 and 2010.